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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
The 879.75 downside target given here yesterday is still valid, although I prefer the lower Hidden Pivot at 869.50 given in today’s commentary as as place to try bottom-fishing. An 868.75 stop-loss is suggested. Alternatively, the futures would need to pop to 898.25 to turn the lesser charts bullish.
In after-hours trading the futures were stalled at midpoint resistance, 116^14. If they get past it, however, a Hidden Pivot at 119^05 would be in play, and with it the potential to kick the hourly chart into high gear. Please note that a rally achieving 119^05 would have exceeded a total of three prior peaks, including two “externals,” signaling a move of at least three to four weeks’ duration. Once above 119^05, a path would be open to around 122.
The futures have fallen to within $2 of the 911.30 pivot we were using as a minimum downside objective for the short term, but in off-hours trading late Monday night they appeared capable of pushing the support aside and continuing down to 907.30. I’ll recommend bottom-fishing there with a minimum 0.40 stop-loss, but if it’s hit we should infer more downside to at least 903.80, a Hidden Pivot that can also be bottom-fished with a very tight stop-loss. Both targets are shown in the accompanying chart.
With gold futures approaching a tradable turn, we can try bottom-fishing in this vehicle by bidding 3.10 for two August 89 calls (GLDHK) . That would be an attractive price if the stock dips down to 88.87, a Hidden Pivot support, before turning around. You can pay a dime more if the calls are out of reach. ______ UPDATE: GLD is hanging tough above 90, so we’ll put this trade aside for now.
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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 Tuesday
There’s a subtle but promising Hidden Pivot support at 13.260 where you could try bottom-fishing today with a stop-loss as tight as three ticks. That number can serve as a mininum downside objective for the near term, but if it’s decisively breached brace for more slippage over the near term to as low as 12.790.
If the futures close beneath a midpoint Hidden Pivot support at 1.3792, my minimum downside objective for the near term, look for the selling to continue to at least 1.3577.
I expect sellers to push the Gold Miners ETF down to at least 34.10 before it turns around. If the opportunity arises, we’ll attempt bottom-fishing there.
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Shorts Back Away, Letting Stocks Fall
by Rick Ackerman on June 23, 2009 1:01 am GMT · 2 comments
A few more days like yesterday, and bears could be pardoned for feeling a little cocky. By simply keeping their cool Sunday night, they left DaBoyz with precious little buying power when stocks began to trade Monday morning. The result was a 200-point decline to start the week. That’s even worse than last Monday’s step-step-stumble out of the gate, which primed the Dow Industrials for a 187-point decline that day. The mood on Wall Street has definitely changed, and nowhere is this more evident than in the failure of the world-class » Read the full article