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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
Because the dollar is in such crucial territory, we should monitor it very closely in the days ahead. Most immediately, we should note that DXY is forming an abc uptrend that will require a decisive push past a 78.97 midpoint to “actualize” the promising bullish impulse leg created in the last two sessions. The pattern is shown in the accompanying chart, and it projects to as high as 79.33 over the near term. If the dollar, now perched at the edge of an abyss, is about to turn higher, it should have little trouble reaching the latter number and then pushing past it, presumably the same day. _______ UPDATE (11:18 a.m.): DXY has bounced weakly after tiptoeing to the very edge of the abyss, testing the support of June’s key low in a way that hardly inspires confidence. The support looks likely to fail.
The already maniacal pitch of Goldman’s rally has turned parabolic, suggesting that the rally could soon reach a blowoff top. We impede its progress gingerly if at all, but even so, the pattern shown in the accompanying chart is clear enough to warrant a short at its 173.10 Hidden Pivot target. I’ll leave this trade to your designs, but officially we’ll look to buy two September 160 puts if and when the stock gets within 10-15 cents of the target.
A compelling Hidden Pivot target sits not far above, at 68.35, but if it’s breached by more than 6-8 cents expect the rally to continue to at least 68.99. The lower number looks like the better place to try shorting, since the higher is too close to a whole number where at least moderate “natural” resistance will be anticipated. _______ UPDATE: The futures topped at exactly 68.99 before retreating sharply. In retrospect, the safest trade would have been a long from above 68.35. In reality, anyone who followed my advice would have lost money shorting the lower of the two pivots given, though not the higher.
Just a reminder that we own the September 270 – July 510 strangle for 13.20, having legged into it just as volatility was going comatose. Now, however, Google seems to be reviving, turning the call-option portion of our position from a distant longshot into a mere longshot. I’m not suggesting buying any calls right now if you did not hold them originally, but it’s time to notice that the 15% rally needed to push our calls into-the-money is not so farfetched.
These days, we speak of the price action in Gold as “bullish” in the same way we would describe a patient on life support as “alive”. It’ll get better, I’m sure, but probably not before the Great Bear Rally of 2009 (/2010??) ends with either a bang or a whimper. I’ve tried to sound encouraging by saying Gold futures are at least tradable while we wait, but after snoozing through Friday’s dirge, I’m not so sure. Check out the graph if you want to see a picture of accumulation so quiet that a mere $10 rally would be a relative thunderclap. _______ UPDATE (11:21 a.m.): Gold has topped today a dime above a modest target given here earlier, a Hidden Pivot at 959.90. You can go back to sleep now.
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SIDE BETS for Monday
Unlike the banks, IBM still makes money the old-fashioned way, selling services and products. It has had quite a move from March’s lows near 83, but the rally could end at 127.12, a Hidden Pivot. Keep that number in mind if you’ve got a long-term position in the stock or would like to try shorting it.
I like a Hidden Pivot at 14.020 as a minimum upside objective for the near term, but any higher would imply 14.385.
Hidden Pivot Webinar & Tutorials
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As California Goes, So Goes the Nation?
by Rick Ackerman on July 27, 2009 12:01 am GMT · 9 comments
As California goes, so goes the nation? We had better hope not, since the state’s economy is imploding so swiftly that it threatens to take cities and towns from Eureka to San Diego down with it. Consider the plight of El Monte, a city of 125,000 in Los Angeles County that recently cut expenditures to the bone in order to close a $9.5 million budget gap for the fiscal year begun in July. Working frantically against an inflexible deadline, local officials furloughed most of the city’s 375 workers, laid off 17 police officers and closed down an aquatic center for all but four months of the year. Then they got the bad news: Sacramento » Read the full article