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COMMENTARY for Monday
TODAY'S ACTION for Monday
PICK OF THE DAY for Monday
The gnarly-looking pattern shown in the chart projects a tradable low at 135.30, but because this trade is being offered as a Pick of the Day, we'll use a more conservative target at _____. If and when the stock approaches that Hidden Pivot, touching ____, buy a single October 150 call (APVJJ). I estimate they will be trading for around ____, but you may be able to improve on that price by tracking the bid/asked spread closely intraday. ______ UPDATE: Cancel the bid, since AAPL is trending up after having traded no lower than 134.53....
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Rick's Picks for Monday
The rally off Friday’s lows may have looked ferocious to those who were short, but from a Hidden Pivot perspective it has been deliberate and even a bit timid at times. Notice in the hourly chart how each thrust over the two days of the rally has stopped shy of breaching all prior peaks to the left of it. Instead, the ascent has unfolded one low-wattage impulse leg at a time. As of Friday’s close, the futures looked ready for yet another push — to at least 115^09 if that Hidden Pivot’s midpoint sibling at 114^21 gives way. However, bulls will need to do just a tad better, pushing past a tiny, look-to-the-left peak at 115^11, to clinch their case; otherwise, it may require a re-test of the recent low at 111^21 to put in a durable base.
The head-and-shoulders pattern flagged here recently appears to be playing out in textbook fashion, although we may be able to improve on the forecast by using a Hidden Pivot target at 925.50 that was mentioned here earlier. You can try bottom-fishing there with a stop-loss as tight as 924.90, but please note that a picture-perfect bottom based on the head-and-shoulders pattern would imply a reversal near 917.00 — or perhaps even in the low 880s if the selling gets a little crazy. Alternatively, bulls could seize the advantage today, turning the hourly chart positive with a print at 951.90.
Conventional support at the too-obvious trendline first noted here last week during the morning briefing will take precedence over any Hidden Pivots today, but if the line is hit for the fourth time, don’t expect to get long there without having your confidence tested. My suggestion for bottom-fishing would be to use a Hidden Pivot at 927.75 that is not far below the trendline. By then, the breakdown may have served to diminish the confidence and resolve of your would-be competitors. _______ UPDATE (1:15 p.m.): Green shoots of reality made their first appearance in ages this morning with a flurry of selling that brought the futures down to 921.50 before they found a reason to bounce. The decline was impulsive on the hourly chart, suggesting that this will be more than a one-day correction.
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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.
SIDE BETS for Monday
If the futures breach a midpoint support at 1.3938, look for the decline to continue to at least 1.3847.
If a Hidden Pivot at 570-4/8 doesn’t contain the selling, look for the futures to group their way down to visually obvious support near 563.
Friday’s high at 90.65 coincided to-the-penny with a Hidden Pivot target easily visible on the 30-minute chart. To sustain the momentum, bulls will need to push this vehicle up to 90.95 today — or even more convincingly, to 91.65.
A Hidden Pivot target at 14.345 is my minimum downside projection for the very short-term, although a pop today or tomorrow to 15.095 would put bulls back in charge for the moment.
A Hidden Pivot at 326.21 is my worst-case downside target for the near term, and you could bottom-fish there aggressively with a stop-loss as tight as 325.99.
Hidden Pivot Webinar & Tutorials
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Bear Rally Provides Cover for Spinmeisters
by Rick Ackerman on June 15, 2009 1:04 am GMT · 4 comments
Bailing out the economy and the banking system has been such a brazenly corrupt, mendacious and, ultimately, doomed enterprise that one could almost forget for a moment how very clever the perpetrators are. If we needed proof that these guys are the slickest behind-the-scenes spin doctors around, consider the following two headlines that ran on successive days atop the Wall Street Journal’s front page. “Rate Rise Clouds Recovery” was the grim news that greeted us last Thursday, on day one. The article described how, despite the Federal Reserve’s explicit strategy of buying as much Treasury paper as it takes » Read the full article