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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
Dueling impulse legs left a slightly bullish bias Tuesday night that had the potential to reach 927.25 in the early going Wednesday. It would take a bit more than that, though — specifically, a print at 932.25 — to alleviate the prospect of boredom by refreshing the bullish trend on the hourly chart. If I have underestimated short-squeeze power that may still be lurking, keep in mind that the futures could conceivably hit 943.50 in a pre-holiday surge.
There’s a midpoint support at 13.09 that we can bottom-fish with a 13.11 bid for 200 shares, stop 13.06. If the stop is hit, look for the selling to continue to 12.15. If the stock gets within three cents of that price, buy four August 12 calls (SLVHL), good through Monday. If you want to park a limit order with your broker, a price of 0.70 for the calls would be a decent buy. The snapshot of my option calculator (see inset) shows how I arrived at a price for the options. It may come in on the low side, since call option often pick up “juice,” or volatility, when a stock falls (even as premium levels drop in absolute terms). ______ UPDATE: The stock, which rarely fails to open on a gap, gapped down through the 13.09 support, negating our trade. However, the play at 12.15 can still be attempted, since that Hidden Pivot has become our new minimum downside target. Make the order good through Friday, and lower the bid for the calls to 0.60. _______ FURTHER UPDATE (July 21): SLV made a key low at 12.27, 12 cents above our target, on July 13, so we took no action. The stock subsequently rallied as high as 13.53 a week later.
A midpoint support at 920.60 is equivalent to the one I’ve flagged in SLV, but if you bottom-fish there a stop-loss no wider than 0.40 is advised. A downside breach would imply more selling to come and, presumably, a test of the 913.20 low recorded on June 22. Alternatively, the futures would need to touch 930.70 to negate the targets, and 937.10 to turn the lesser charts (i.e., 15-minute and lower) unambiguously bullish.
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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 midpoint resistance at 430.56 should magnetically draw the stock higher, but GOOG will need to close above it for two consecutive days to make a test of early June’s high near 447 an odds-on bet.
A midpoint support at 13.405 is my minimum downside objective for the near term, but any lower would hint of more weakness to as low as 13.115.
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Don’t Be Fooled by Gold’s Tired Look
by Rick Ackerman on July 1, 2009 1:42 am GMT · 3 comments
Gold futures eased lower yesterday, apparently too tired for the time being to continue treading water. The Comex August contract settled at 927.40, down a little more than one percent on the day. If you’re a long-term investor looking to do some bargain-hunting, however, we’d advise waiting for even better prices, since it looks as though the futures » Read the full article