Monday, July 20, 2009

We can use 9158 as an upside target, although a pullback to the 8622 midpoint associated with that Hidden Pivot may be necessary before the Indoos can mount an assault on early June's high at 8875.

We were unable to roll our calendar spread because the August 10 calls we'd needed to short for 0.35 traded no higher than 0.22. Since we covered the short July 10 calls for 0.05, we now hold four September 10 calls effectively for a CREDIT of 0.55 apiece. That means the worst we can do, no matter where the stock is trading at expiration in September, is make $220 on our position.  Let's continue trying to build more edge into it by offering four August 10 calls short for 0.35, good-till-canceled.  _______ UPDATE (July 23):  With SLW trading as high today as 9.47, our order to short four August 10 calls for 0.35 filled easily.  That means we now hold the September 10-August 10 calendar spead effectively for a 0.90 CREDIT, plus its current value (around 0.25 at the moment).  Do nothing further for now. 

The headline atop the front page of this morning's Boulder Camera suggests a city struggling diligently to balance its budget: "Work-Week Options Eyed".  Reading this, one might infer that the city is contemplating unpaid furloughs or some other means of reducing payroll outlays, right?  That would be entirely appropriate, given that Boulder faces a $5 million budget shortfall next year. But that is not what the story is about. In the first place, it is not the city that is "eyeing" changes in the work week, but the workers themselves. And what they have in mind is nothing so onerous as unpaid work days;  rather, they have envisioned for themselves four-day work weeks - let's be candid and call it three-day weekends -- as a supposed way to close the budget gap. Thus, instead of shuffling paper for eight hours a day, Monday through Friday, they are proposing to do their paper-shuffling in four ten-hour workdays, presumably Monday through Thursday. Talk about chutzpah!   And where, you might ask, are the savings supposed to come from?  According to the workers, the city's energy costs would drop, since certain municipal buildings would be closed one day a week. However, any taxpayer hoping to reap a savings bonanza is bound to be disappointed, since the sums involved are laughably small in comparison to Boulder's $5 million problem. In fact, by having the Boulder Municipal Building go dark one day per week, the city would save a paltry $11,000 per year. We can think of a much easier way to save five or six times that amount -- i.e., by eliminating one, presumably superfluous, paper-shuffler from the payroll. Long-term, the savings would be even greater, actually, since there would be one less pension plan to fund.  A Feudal System We would surmise that most

The most useful benchmark I can cite right now is ____, a midpoint resistance derived from the pattern shown in the accompanying chart. It's not very compelling because the larger pattern has experienced so many disruptions, but we can use it as a minimum upside objective for the near term (meaning two weeks or less) nonetheless. It's sibling 'D' target lies at _____, a number mentioned here earlier.  As noted here before, the most powerfully bullish signal we could ask for would be an impulsive rally that exceeds both of the numbered peaks without taking a corrective breather. 

There are no especially compelling targets above, but a Hidden Pivot resistance at 173.10 that comes off the 180-minute chart can serve nonetheless as a minimum obside objective for now.

Is the dollar breaking down? The burden of proof has returned to the bulls, since DXY has been unable to generate any impressive impulse legs on the hourly chart since bottoming in early June. Now, some bearish impulse legs have begun to occur on the hourly, so we'll use the _____ target shown in the inset as a minimum downside objective.  The sibling midpoint of that number is ____, a support that was approached last week within 0.10 points. If it gives way this week and is exceeded on a closing basis, a further decline to at least _____would become an odds-on bet.   

Apple looks likely to cruise on up to at least 157.53, the nearest Hidden Pivot above with any potential stopping power.  Shorts from that level could use a stop-loss s tight as 15-20 cents.

There's a bullish target for the Dow Industrials in today's Side Bets, but the Indoos will first need to push above a daunting peak made in early June. Bottom line:  Technical signs point higher, but we should monitor the rally's vital signs on the lesser charts, since this would be a natural place for the bear rally begun in early March to fail.

In just a week's time, T-bond futures have given up more than half of their impressive gains from the June lows, creating a nasty impulse leg on the intraday charts in the process. Now, they are probing for support which, from a Hidden Pivot standpoint, could materialize as high as _____, or at ______ if any lower. However, if the lower number is exceeded on a closing basis, we could see further weakness over the near term to as low as _____. _______ UPDATE (10:52 a.m.): The 115^14 target caught the low of this morning's swoon by a single tick. The futures have since recovered by nearly a full point, but if they should revisit the low and close below it, _____ would become the new downside objective.