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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
A small pattern that developed during yesterday’s briefing turned out to have been the best entry opportunity of the day. The subsequent rally reversed early-morning damage, but without engendering a true impulse leg on the hourly chart. In fact, we need to drop down to the five-minute bars to find a qualifier (see inset) — one with a ‘C’ low that is just a tick higher than ‘A’. That’s enough to give us an uptrend to calculate, however, and a c-d midpoint at959.00 that so far has stymied the August contract’s recovery. If and when the futures get past it, we could expect the thrust to continue to at least 963.30. However, if weakness prevails, a Hidden Pivot at 925.50 corroborates the head-and-shoulders implications noted in today’s commentary.
Hidden Pivot seminar grads should be feeling deja vu when they look at the choppy rally that has been taking the futures higher without yielding much in the way of trading opportunities. The 985.30 rally target here was a “go” from 938.25, when a long entry was triggered according to our rules. However, the subsequent swings would have eroded the patience of even the most confident bulls, since risk:reward for a buy-and-hold position has been rendered increasingly unfavorable with each gratuitous swing. Meanwhile, I wish that I could offer night owls a succulent morsel to tide things over, but the futures have been manipulated into an extremely narrow holding pattern that yields no handholds.
The 72.15 rally target proffered here yesterday would have worked for those who sought to get short, but only with diligence, since the futures’ first encounter with this Hidden Pivot resistance produced some heavy chop. Now our focus will shift to a higher target at 74.47 also given here earlier. I’m going to alter it slightly, to 74.39, and recommend that you short two pennies below that number, stop 74.64. You’ll be on your own thereafter, but you’d need a pullback to at least 73.64 to take partial profits or implement a trailing stop. _______ UPDATE: The most recent Thursday carried to 73.23, and although the 74.39 target above it is still valid in theory, it is no longer very compelling for trading purposes.
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INTRADAY TRADING NOTES for Friday
Now that a global pandemic has been officially declared by the World Health Organization, I know you are wondering how our birdf flu correspondent, Erich Simon, see it. Here’s his latest — as always, not for the squeamish:
It just keeps getting better, Rick, and anybody not moving aggressively to the short side is not seeing the picture.
Yes, the H1N1 virus is on a crash course with HP H5N1, a recipe for the end of civilization. But just now it was announced (out of the UK… a country obsessed with Pandemic realities and preparing now for “millions” of upcoming cases, making prophylactics like school closures a moot point), it was just announced that surprise, the H1N1 virus, which mixes readily with other viruses, is going to mix with SEASONAL INFLUENZA strains when the flu season opens in the autumn in the Northern Hemisphere, if not sooner down south. It is a near given.
And this presents an entirely new dimension to the scenario. Because the H1N1 virus is going to ‘re-assort’ with any of myriad seasonal strains, a large percentage of which will only serve to increase virulence and casualty count, not to mention the increased affinity for efficient transmission. In fact, the Brisbane strain… out of Australia, was included in last year’s emergency overhaul of seasonal flu vaccine because it is a particularly nasty bug capable of killing millions and millions if that one mates with the Phase 6 H1N1.
Mexico Just ‘First Wave’
And it only gets better still. On a lesser note, but itself a new revelation straight outta the mouth of Margaret Chan… what Mexico experienced here a coupla months ago was only The First Wave of the now official Pandemic of 2009. The preamble. According to her, The Second Wave is on its way and will be arriving shortly, and per my understanding of second waves in Pandemics, those are the ones that hit the hardest.
So The First Wave closed Mexico City and nearly closed the border. What’s the next wave gonna do…?
The viral fireworks are only getting started across so many fronts now that the dominoes are gonna go tumbling in all directions with increased case fatality numbers already baked into the cake, replay of 1918 or not… with untold reassortment possibilities ranging from millions dead, reminiscent of the ‘57 and ‘68 Pandemics, to tens and tens of millions dead, reminiscent of the 1918 Pandemic… and right on up to the worst case… an H1N1-HP H5N1 combo, with numbers dead in the 99% category across regions of the planet.
Vaccine? Forget It
And the stock market is not going to crash…? How’s that gonna work, with more money printing? The printing presses are on respite as rates regurgitate from all the economic water boarding. And it won’t matter anyhow. When all the inflation cracks start seeing their friends dropping dead from who knows which strain of which recombinant… forget the vaccine, there won’t be enough working labs to test all of the dead people to even begin to assemble the seed antigen needed to get any vaccines into production…, but there certainly won’t be anyone going in to man the presses. At least not any of THEM.
No, the Wall Street and Washington organized crime family will be running for their lives, throwing money outta their helicopters just to clear a path to escape.
Meanwhile, my Pharmacist sister with Express Scripts was just informed by her union that wages are being cut and jobs are being transferred to Chinese nationals working out of Ohio. More on that later. But the message seems to be ‘take the pay cut or get fired’.
So the band plays on…
E.
SIDE BETS for Friday
No evidence of a plunge in the offing, but were it to occur, a Hidden Pivot at 14.395 represents a great buying opportunity. Alternatively, 15.910 is possible on a surge, subject to a possible stall at 15.605.
Yesterday’s high looked like a short, since it occurred a hair above a 110.14 pivot. Suggest a July 100 put for 1.00 if you don’t want to spectate.
Thge 151.24 target still looks like a show-stopper. Second-wind target: 155.04.
Don’t pass up an opportunity to short this pup at 2.4735 if it gets there today.
Could all of the selling be due to some flatulent antitrust probe of Google’s virtual library? Relief may be on the way in the form of a Hidden Pivot support at 424.55.
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Gold Needs More Time to Dither
by Rick Ackerman on June 12, 2009 1:20 am GMT · 3 comments
We’ve never been gung-ho about head-and-shoulder patterns, mainly because they seem to pop up everywhere you look for them. Even so, there’s something to be said for the elegant simplicity of the two head-and-shoulder formations show in the charts below. The top chart is a bearish pattern in Comex August Gold that has been gestating for nearly a month. Its mirror image, shown in the Dollar Index chart below it, is a bullish, reverse head-and- » Read the full article