Friday, August 7, 2009

Investors supposedly are jittery about the unemployment numbers due out this morning, but it's hard to see how anything below 10% would set off an alarm. On the other hand, if the number comes in lower than the usual bunch of numbskulls supposedly were expecting, bears might have to scramble for cover.

UNG slightly exceeded a Hidden Pivot at 14.12 that has been coming for a week, but it remains to be seen whether buyers will get second wind for a push to another at 14.36.  If there is strength percolating beneath the surface, we should expect the steep correction begun yesterday to go no further than 13.01, a 'midpoint' pivot whose 'D' sibling lies at 12.58.

A Hidden Pivot at ____ is still my minimum upside expectation for the near term, but if the futures pull back before launching toward that number, they would likely find traction near _____, its midpoint sibling. The most bullish scenario I could imagine for today would be a close above ____.  That would make the target at _____ broached here earlier a shoe-in next week.

Threatened by a fall of the cliff, DXY seems to have summoned hidden reserves of buying power; however, it will still need to hit a minimum 78.49 today in order to "actualize" yesterday's potential.  Although the intraday high exceeded a minor Hidden Pivot resistance at 78.12, the two-cent overshoot was not sufficient to leave us with a bullish bias.

Cramer says commercial real estate has bottomed, and Abby Joseph Cohen evidently thinks we're in a new bull market. The uncharitable thought, "Idiots!" springs to mind, but neither of these celebrated commentators lacks for brains, as we well know. Abby is simply following a how-to-succeed script that she wrote years ago and which has made her rich and powerful, to wit:  Remain outrageously bullish no matter what the economy is doing, and sooner or later investors will embrace your every utterance as though it were the Sermon on the Mount. She was out-of-fashion and nowhere to be seen in the late stages of the dot-com crash, and missing in action once again when the stock market collapsed last year. But Abby is back in the spotlight now, and doubtless attracting hordes of investors who are hoping with all their hearts that she's right. Of course, it doesn't hurt that her sponsor is Goldman Sachs, a firm with enough clout to move heaven and earth if nothing less will suffice to make her predictions come true.   Abby has an acolyte in the ubiquitous Larry Kudlow, a guy who would say virtually anything to get his mug on television. But Cramer tops them all with his frenetic, high-decibel broadcast that seems to echo in the room even after you've turned off your TV. Cramer is a guy we love to hate, but in the end, because he's so entertaining, we give him a free pass, even when he says things that flatly contradict the reality we see all around us. (Have you visited the local mall lately? Companies that decorate the windows of vacant shops are probably among the few growing businesses in the retail sector.) Cramer clearly is not the only person who sees good times ahead for commercial real estate.

The futures crushed a minor midpoint support at 9180, suggesting the weakness will continue down to at least 9111, its 'D' sibling. You can bottom-fish there with a very tight stop-loss, but my hunch is that the trade will work better if the target is hit in the first 90 minutes or so.  (Note: It would be invalidated by a thrust above 9249.) Alternatively, if the futures take flight, look for the frenzy to hit 9395 before the rally stalls.