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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
After Thursday’s close, on word of punk earnings from Microsoft and American Express, DaBoyz took the futures down 4 points and leveled off. This implies they think the Dow will open down by about 30 points Friday morning, although expectations could easily darken as the evening wears on. If so, I’ll recommend bottom-fishing at 955.75, stop 955.00, provided 966.00 has not been exceeded to the upside first. _______ UPDATE (11:22 a.m.): The futures went no lower than 962.50 on the opening, negating our bottom-fishing strategy but also hinting that, before too long, bears could once again be on the ropes. I’m somewhat surprised the 955.75 bid didn’t fill. On the other hand, the fact that AXP shorts are getting hung out to dry — the stock is off a mere 20 cents at the moment after opening a dollar lower on a gap — is no surprise at all. Microsoft is having a bit more trouble, however, and has not yet rallied into the $2 gap on which it opened.
Yesterday’s bounce came from a too-obvious place — just 0.09 points above the key low at 78.33 recorded in early June — suggesting that traders were not exactly tripping over each other to make sure they got a piece of a potentially important low. We’ll monitor the dollar’s vital signs closely in any case, since a thrust today or Monday exceeding 79.78 (see chart) could significantly improve the outlook for the near term.
TLT breached a midpoint support at 90.80 by 0.23 points yesterday, hinting of more weakness to come. If so, we can use the support’s ‘D’ sibling at 87.90 as a minimum downside target next week. That would imply the long bond is headed for a nasty spill.
The Gold Bugs Index is stealing up on an important midpoint resistance at 368.43 that is tied to a 433.64 target. The so-far high has been 366.91, but let’s stipulate that HUI close for two consecutive weekly bars above the midpoint before we look for ways to step up the buying in this vehicle.
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SIDE BETS for Friday
A ‘hidden” support at 1566.00 can serve as a minimum downside objective for Thursday night, but if it’s breached, brace for additional weakness to as low as 1554.00. That number can be bottom-fished with a stop-loss as tight as 1.00 point.
Minimum upside expectation for the next 4-7 days: 2.6075. That’s a Hidden Pivot resistance that comes off the weekly chart, so it could prove to be a rally-stopper.
A Hidden Pivot target at 9168 offers an enticing opportunity to get short today with a stop-loss as tight as 5-7 points.
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News Unlikely to Deter Bulls
by Rick Ackerman on July 24, 2009 12:11 am GMT · 4 comments
Although two big companies, Microsoft and American Express, reported atrocious earnings yesterday after the close, we shouldn’t expect the news to slow the relentless rise of stocks for long. Investors were obviously blithely unconcerned about earnings on Thursday, showing their eagerness to buy stocks by pushing the broad averages to their most impressive gains in nearly two weeks. The S&Ps settled at 976, up 2.3% on the day, and looked like an even-money bet to achieve their biggest back-to-back weekly gain since » Read the full article