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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
If the E-Mini chart was human — which, in a way, it is — I’d have to keep holding a mirror under its nose to make sure it was still alive. Nonetheless, I still see a descent to at least 879.50 as both logical and likely, followed by a second wave of selling that hits 869.50. The latter number, a Hidden Pivot, is where I’d suggest bottom-fishing, using a three-tick stop-loss. Alternatively, and so that we don’t get caught unawares by a turn from somewhere above our targets, use 898.25 as a bullish trigger. _______ UPDATE (2:53 p.m.): A rally driven by the Fed-watching obsessions of the moment went against the forecast, but it was easily identifiable as a fraud, since even on the 15-minute chart there were no impulse legs to reckon. The high reached 906.50, but I”d suggest going back to sleep until such time as 925.00 is hit, since that’s what it would take to turn the lowly 15-minute chart bullish.
If the futures make it down to 1403.25, that’s a Hidden Pivot support that will be well worth bottom-fishing. An initial stop-loss as tight as 1402.25 can be used, but switch to a 2.50-point trailing stop if the expected bounce hits 1411.00. Minimum price objective: 1416.50. _______ UPDATE: The futures went higher, showing more strength than the broad averages while denying us a cheap entry opportunity.
The futures struggled in vain yesterday to notch a recovery high above the 928.50 threshold I posted intraday in the chat room. That leaves us still looking for a possible swing low at 907.30; or if any lower, 903.80. Alternatively, if bulls are going to turn this vehicle around, it will take nothing less than a print at 945.10 by no later than Thursday to do the job. _______ UPDATE (3:00 p.m.): The futures spiked to 944.40, then detumesced almost as swiftly, falling $17 so far. We did not get caught in this bull trap, however, because the seemingly impresssive rally failed by 0.70 to reach our bullish trigger price at 945.10.
Yesterday’s powerful turn from above our target has very bullish implications for the near term, but the futures will still need to get past a key Hidden Pivot midpoint at 1.4175 to prove their mettle. A two-day close above that number would imply additional upside potential to as high as 1.4613. _______ UPDATE (3:05 p.m.): The futures made it only to 1.4133 before collapsing to wipe out nearly all of the previous day’s gains. Once again, a coldly mechanical reading of the charts spared us any emotional investment in the rally.
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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
A swoon to 34.58 would present a buying opportunity, tightly stopped, since that is a Hidden Pivot support that looks likely to reverse the trend.
If the pullback from yesterday’s peak at 69.68 reverses from 66.90 or higher, the rally has the potential to go as high as 71.
Little stuff Tuesday night pointed no higher than 14.100. Failing that, a drop into the high $12s awaits. It would take a print at 14.460 to turn the hourly chart bullish.
Yesterday’s seemingly impressive burst didn’t even achieve impulsive status on the 15-minute chart. I’ll be a believer if GDX gets past a small peak at 39.24 made a week ago on the way down.
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Lemmings Stoke Flight to ‘Quality’
by Rick Ackerman on June 24, 2009 1:13 am GMT · 9 comments
It takes some getting used to whenever the phrase “flight to quality” pops up in print or on the business shows these days. Supposedly, that is what has been driving Treasury Bond prices sharply higher since June 11, when futures contracts on 30-Year U.S. Treasurys bottomed at 111^21. That equates to a yield of about 4.84 percent. Yesterday the same contract settled at 117^11, so eager were buyers, evidently, to lock in 30-year rates of » Read the full article