Although we remain as bearish on the U.S. economy as anyone we know, our obsessive focus on the shares of Goldman Sachs has kept us unwaveringly bullish throughout the stock market’s spectacular bear rally. Most recently, ever since Goldman hit a bullish tripwire at $121 a couple of weeks ago, we’ve been looking for the stock to continue up to at least $144.19. That’s a key resistance that we refer to as a Hidden Pivot, and it has the potential to stop the rally cold.
For a while yesterday it looked like the pivot might be tested: The stock shot up to $140.36 late in the session, but a swoon in the final hour postponed a rendezvous with the target that seems all but unavoidable by week’s end. The apex of yesterday’s move marked a $14 gain since Monday, a powerful surge that places Goldman among the high-beta leaders of the Big Board. But the Dow was up a hundred points as well, settling near the intraday high and leaving shorts on the ropes at the final bell.
Apple and Google Targets
We have rally targets outstanding in a few other trading vehicles, making it even more likely that we’ll be hearing from the Fat Lady sometime soon. Apple shares, for one, have room to move before they hit an important Hidden Pivot resistance, and so do the shares of Google. Coming in yesterday morning, we had recommended buying Google put options if the stock hit 407.78, which it did. However, the actual high at 408.28 occurred on a $6 short-squeeze in the opening seconds of the day, before trading in puts and calls had begun in earnest. The stock subsequently fell back $7, and it’s still unclear whether we should be disappointed about being shut out of the puts. That’s because the stock looks like it will go to $439 if it closes above the Hidden Pivot at 407.78.
Concerning the precious metals, they continue to impress by more than holding their own against Wall Street’s running of the bulls. As noted here yesterday, Comex June Gold, currently trading near $910, will need to touch 935.90 to inflict real pain on shorts; however, the futures look quite comfortable in the meantime building a base above $900 for the inevitable launch.
(If you’d like to have Rick’s Picks commentary delivered free each day to your e-mail box, click here.)
{ 2 comments }
Good luck, all, with the metrics defined to the penny. I am looking to get short on ANY gap up opening (buying SDS and selling futures short) in this area, Goldman or no Goldman.
If that scenario doesn’t occur (and it probably won’t — but fortunes can be made on IMprobabilities, so I continue to seek them…), then I just sit long gold, on the sidelines concerning everything else.
When hunting a trade, expect to go home after dark with a wet ass and nothing in your shoulder tote. Most of the time. Of course, there are those rare times when things wander into your sights…
Here’s to rare times.
Good luck and good hunting, all.
From Time Magazine,
Monday, Nov. 09, 1936
Cash & Comeback:
The wreckage Mr. Catchings left behind him in Goldman Sachs was appalling. Market value of Goldman Sachs Trading shriveled from $500,000,000 to less than $10,000,000. Funnyman Eddie Cantor, who lost a sizable fortune in the stock, made the name of Goldman Sachs a sure-fire gag from coast to coast. Law suits received so much publicity that Wall Street pranksters used to call up Goldman Sachs, ask for the “litigation” department…
Comments on this entry are closed.