The futures sold off hard after making their high early in the day — but then, when haven’t they done so? The important thing is that buyers had no trouble pushing the August contract past a Hidden Pivot resistance at 985.80 noted here earlier. Night owls should put a stink bid in at 970.60 stop 969.90 and keep your fingers crossed. If the futures move higher without deferring to our niggardly effort, use a pullback that begins from between peaks 1 and 2 for “camouflaged” entry. _______ UPDATE: Sweeeet. The stink bid worked rather nicely, since August Gold touched a low of 970.50 overnight (i.e., 4 a.m. EDT) before uncorking a nearly $18 rally to a so far high this morning of 988.30.
COMMENTARY for Tuesday
Rick's Picks for Tuesday
We hold four September 10- June 10 calendar spread for a net credit of 0.10, a position that cannot lose and which has the potential to produce a gain of around $500. We are also bidding 0.25 for four July 12.5 calls in order to build more edge into our position across a wider range of prices. Continue to bid 0.25 for the calls today, but step up to 0.30 on the opening. The stock looks like it needs to consolidate for at least another day or two before leaping anew. By exceeding a Hidden Pivot resistance yesterday at 10.72 (30m chart, where A=7.07), Silver Wheaton shortened the odds of another bullish thrust.
The 68.05 target broached here yesterday was tradable, although not with a stop-loss as tight as the 21-cent out I’d advised. The target more or less contained the move for most of the day, but the futures were bounding higher at the bell, threatening to ring shorts’ necks yet again on Tuesday. If so, buyers are likely to face at least some resistance in the form of a minor Hidden Pivot resistance at 69.38 (see chart). It looks too delicate to use for shorting, but if it shows no stopping power whatsoever, that would strongly suggest crude is going to make $70 easily on this run.
As you can see in the accompanying chart, Goldman was just marking time yesterday, presumably setting the hook for any bears who may have taken comfort in the stock’s laggardliness. Not a single prior low was breached by the $4 selloff, and the stock went bounding into the close. Concerning the 151.24 rally target mentioned in today’s commentary, the slightly adjusted, correct target is 150.72 I’ve included a chart that shows its provenance for anyone needing to be convinced. The Hidden Pivot midpoint of the pattern is 142.32 so any pullback to that price today or tomorrow should be viewed as a buying opportunity. Incidentally, if Goldman makes short work of 151.24, it would become a good bet to run an additional 5 points to 156.05, the target of a larger pattern. _______ UPDATE (12:15 p.m.): Down $2 so far at its lows, Goldman could have been bought this morning at the 142.32 pivot with a stop-loss as tight as 142.25 (the actual low was 142.26). If you did so, the subsequent bounce to 143.10 should have been used to take partial profits and/or implement a trailing stop. I’d suggest holding at least a token long from this point forward and swinging for the fence.
We should be doubly diligent when a trading vehicle appears to obliterate an important Hidden Pivot target, since we don’t want to be caught unawares by an important turn that comes from the “wrong” place. In this instance, subtle but potentially meaningful signs of strength would come on a thrust exceeding 79.46 today. That would surpass a peak made on yesterday’s head-fake opening, turning the hourly chart bullish in the process. If DXY moves lower in line with expectations, however, the first Hidden Pivot support of significance that it will encounter lies at 77.72, just 0.03 points above mid-December’s key low. There are therefore two important supports at that level, implying that a breach of both in one fell swoop would be quite bearish.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
INTRADAY TRADING NOTES for Tuesday
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Is California the Next GM?
by Rick Ackerman on June 2, 2009 12:01 am GMT · 7 comments
With GM’s bankruptcy no longer hanging over Wall Street, perhaps now investors can get their minds right for some really bad news. We’re talking about the looming bankruptcy of California, of course, and of at least a few more big-budget states whose books are in equally disastrous shape, including New York, Arizona, New Jersey, Nevada, Rhode Island and Florida. All told, the 50 states are looking at budget shortfalls totaling $350 billion over the » Read the full article