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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
To be on record, the following repeats a note I posted in the chat room earlier today: ”967.30 should be used as a minimum upside objective for the near term. This is the Hidden Pivot (HP) midpoint of the pattern begun from 805.20 on January 15. The 180m chart offers a nice panoramic view.” If you work the numbers you’ll find that the ‘D’ target associated with 967.30 lies at 1069.60 a price that I did not mention earlier. Usually I would infer the move to ‘D’ is under way following a two-day close above the midpoint. In this case, however, we’ll be more cautious, making the rally prove itself each step of the way, since we’ve had evidence already that the bull cycle begun in mid-April may be a bit timid.
I’ve been bearish on the dollar for a while, but with expectation of a potentially important low near 80. The exact number shown on the chart is 80.04, and, given the high quality of the pattern, I don’t see how this projection can miss. If the dollar is indeed about to turn we should prepare for a tone change in stocks, gold, silver and bonds, as well as in numerous other, specific vehicles that we track and trade. _____ UPDATE (11:50 a.m.): With a low so far today of 79.86, the target has been breached by 0.18 points. That is not conclusive, but if settlement is below 80.04, it would put a new target at 79.08 in play. An unpaused move to that price would create a fresh bearish impulse leg on the daily chart, since it would surpass a key low at 79.73 made in late December.
A close above 142.32 would shorten the odds of a finishing stroke to at least 150.72. Both numbers — respectively, a Hidden Pivot midpoint pivot and a ‘D’ rally target — occur in the pattern shown in the accompanying chart. Ordinarily I would suggest laying in some calendar spreads at the 150 strike to play this move, but the spreads are quite pricey and would need to be legged on to make the strategy worth our while. The July 150-June 150 spread is trading for around 2.70, but we’ll try to get in for half that price by buying the October call on a dip. If there is no dip, we’ll simply have to forgo the trade. For starters, buy four July 150 calls if the stock touches 131.14 a dive. There is nothing to suggest we will see such weakness today, but if it should occur, that’s where the stock would head. It is a Hidden Pivot support that comes from the 15-minute chart. I estimate that the calls would be a good buy for 3.00 with the stock trading down near the target, so if you want to leave a limit order with your broker, you can do so without fear of being ripped off. Make it a day order.
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FAZ Shares Offer Carny Game Odds
by Rick Ackerman on May 22, 2009 12:01 am GMT · 5 comments