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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
The futures will need to punch through a midpoint resistance at 938.00 to convert yesterday’s impulsive rally into something we can root for. A Hidden Pivot at 945.00 would become the minimum upside objective at that point, and just a dime more (i.e., 945.10) would renew the bull trend on the hourly chart for yet another surge.
I’m not keen on chasing the puts, so let’s move to the sidelines and wait for the minor downtrend play out. If the Diamonds are going to provide us with another opportunity to get short on an upswing, they should put in a tradable bounce from either 84.43 or 83.47, or both. While we’re waiting, you can bottom-fish the second number with a stop-loss as tight as 8 cents. _______ UPDATE: Cancel the bid, since DIA has remained stubbornly buoyant.
The 9008 target is growing a bit stale, even if it remains viable in theory. Here’s a target that is equally valid and which is proffered to stretch the bearish imagination: 7569. It is the Hidden Pivot midoint of the pattern shown in the chart, and the implied 1000-point drop doesn’t seem like much of a stretch in the context of the larger, bearish patterns at work.
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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 Wednesday
Except for the booster stage of this rally, it’s been just mincing steps. The implied power of it would ratchet up a few notches, however, if it hits 117^27 by week’s end.
A breach, even slight, of the recent low at 14.030 could turn things ugly over the near term, since the low fell within a single tick of a downside target that took two weeks to reach. Below it, there is flimsy support around 13.680, where a series of lows occurred in May.
Hidden Pivot Webinar & Tutorials
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What’s Next, an Abby Cohen Sell Signal?
by Rick Ackerman on June 17, 2009 2:40 am GMT · 4 comments
Sometimes common sense comes from the most unexpected places. Consider this bearish take on the stock market from – better sit down for this – a Morgan Stanley strategist, Jason Todd: “Equity markets now implicitly need a V-shaped recovery to sustain further gains,” he told a reporter for the Wall Street Journal yesterday. “We do not expect such a recovery and therefore believe the next move is more likely to be down than up.” What’s next? A warning from Abby Cohen, perhaps, to lighten up on stocks? Actually, it looks like traders » Read the full article