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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The gratuitous hump formed by yesterday’s price action disrupted the flow of the downtrend begun two weeks ago, but because it did not breach the point ‘C’ of the pattern, an 869.50 target flagged here earlier remains valid. We should continue to use it as a minimum downside objective, but our bearishness would have to yield to any rally that exceeds a small peak at 910.50 recorded Monday on the way down.
We set emprical benchmarks because our instincts are so often emotional and therefore unreliable. The benchmark we used yesterday served us well, since it warned that a promising-looking rally was not what it appeared to be. Indeed, after a sharp surge early in the session the futures retreated sharply, giving up most of the day’s gains. The action left a less promising but still buoyant outlook that could power the futures to as high as 949.10 today if bulls gain the upper hand. The pattern is shown in the accompanying chart, and its fulfillment is predicated on a decisive move past the target’s midpoint sibling, 938.30.
If crude is going to get traction, it needs to happen now, since the August contract has created its first promising impulse leg on the hourly chart in more than two weeks. The immediate target is 70.85, and although the futures have already exceeded the 69.45 midpoint sibling of the target, they were threatening to dive below ‘C’ on the hourly chart, negating the bullish outlook for the very near-term.
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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 Thursday
A stink bid at 131.53 is advised while a news media with far too much time on its hands pursues the Jobs transplant story.
Things are looking up, given the failure of yesterday’s selloff to reach a midpoint support at 13.765, let alone its 13.610 ‘D’ sibling. Upside potential is to 14.250 if the futures can get past a lesser hidden resistance at 14.015.
If buyers get second wind, look for a push to as high as 39.89, subject to critical resistance at 38.82.
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Even After Failures, Fed Fever Lingers
by Rick Ackerman on June 25, 2009 12:01 am GMT · 10 comments
The markets displayed disturbing symptoms of Fed-itis yesterday, spasming up and down even though the central bank did nothing even remotely interesting, let alone earth-shattering. Monetary policy was left unchanged, which is the only thing that could have happened. To say the markets overreacted begs an explanation as to why. We can only infer that there are still many investors who cling to the notion that the central bank can jump-start » Read the full article