Member-only content. Please Login or get a free trial of Rick's Picks to view.
COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
Trendline support became resistance yesterday in the blink of an eye, as the futures experienced an unaccustomed setback — their worst point decline in two months. There were no ready explanations for the weakness, although some commentators ascribed it to disappointing economic data that as recently as Friday would not have given bulls a moment’s pause. The move was impulsive on the daily chart (see inset), suggesting that we’ll need to take it seriously from the get-go. However, because there are no compelling Hidden Pivot targets that we can use at the moment, we’ll need to keep a Fibonacci-based support at 913.25 in mind as a minimum downside objective for now. Check back Tuesday if it fails to hold, though, since it may be possible by then to gauge the strength of the selloff using Hidden Pivots. _______ UPDATE: The intraday low at 910.75 hit a “reverse Hidden Pivot” to the exact tick. The number is derived from an ABCD variant that uses k-A-B as the three coordinates thus (on the 60m chart): k=923.50 (May 20); A=876.75 (May 26); and B=957.50 (June 5). Plug those numbers into your calculator, respectively, as A, B, and C and you’ll get your D target at 910.75. Generally speaking, such patterns are not as reliable as the standard ABC patterns we use, but that is not to say they couldn’t become more useful with the application of a few rules that diligent observation over a period of weeks or months might yield.
The 925.50 target has been a while in coming, but I wouldn’t buy it on the second pass today after yesterday’s near-miss. Instead, I’d recommend bidding down near 918.00, using a stop-loss just beyond the 917.00 low recorded in mid-May. That could prove to be too obvious a support to work, but even if so, there should be a bounce from above it the first time it is approached. The safest way to get long would be to use camouflage, which in this instance would be available on a pullback from a tick or two above a 939.70 peak-let made on the way down yesterday. I have drawn a map of sorts to help you visualize this entry tactic, but keep in mind that its success will depend on how nondescript the point ‘B’ high is. If it overshoot 939.70 by more than three ticks, that would negate our edge.
We should judge this rally by how well it handles the two numbered peaks shown in the chart. To create an impulsive thrust of daily-chart degree, the futures would need to get past both peaks without an intervening pause lasting longer than a day. Until then, the sharp move off last Thursday’s lows should be viewed as just a garden-variety bear rally — a dead-cat bounce with nowhere to go.
We’ll stick our necks out an inch today, bidding 1.90 for two August 80 puts (DIJTB). We’d be looking to buy more of them if the futures were aboutto top at a Hidden Pivot resistance, but in this case they have already started lower, negating any edge we might hope to gain by shorting as Hidden Pivot swing point. _______ UPDATE (8:48 a.m.): Lower the put bid to 1.70 and leave it in for the session. With DIA likely to open somewhat higher, there’s no point in sticking our necks out.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
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 Tuesday
The Dollar Index looked like it was on its way up to at least 81.76 yesterday when it got timed out. Any higher today would suggest that this rally has legs.
Any Hidden Pivots we might find would be superseded by visually obvious support near 36.60 that was created by a series of lows in mid-May.
Powerful as yesterday thrust may have seemed, it fell a tad shy of impulse-leg glory on the hourly chart. The September contract would need to beat 1.0366 to accomplish that — 14 ticks above yesterday’s high. Traders please note: a pullback from just 2-3 ticks above 1.0366 would be buy-able.
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on Feb. 29th - Mar. 1st. This two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register, click here.
Like Gold at $990, but LOVE It at $918
by Rick Ackerman on June 16, 2009 12:27 am GMT · 2 comments
Unh hee-yah! Unh hee-yah! Unh hee-yah! Gold futures have been pumping iron for more than a year — and so much the better for all of us if they weren’t up to demolishing the $1000 barrier a couple of weeks ago after getting as close as $992 per ounce. We should regard bullion’s tedious ups and downs over the last eighteen months as quiet preparation for an explosive show of strength. When it finally happens, detonation will be so powerful » Read the full article