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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
I had to check Edwards & Magee to see whether yesterday’s weakness may have compromised the bullishness I inferred from the island gap reversal in this stock. My guess is that the renowned authors of Technical Analysis of Stock Trends would have seen it as a mutant specimen of the genre to begin with, since the two gaps do not overlap. In any event, if we simply look at it as a routine abc pattern, filling in the gaps with hypothetical, unbroken bars, as we are wont to do, a 155.25 downside target comes into focus, subject to a bounce from the 158.07 midpoint. In fact, the bounce has occurred from 158.00, so we might infer that a dive to 155.25 awaits if the midpoint is breached decisively.
All signs were pointing higher at the end of yesterday’s regular session, although it was only on the lowly five-minute chart where Wednesday’s rally managed to look like hot stuff. There’s little point in projecting a Hidden Pivot top, since any thrust is destined to do battle with heavy supply around 1015. (For the record, there’s a Hidden Pivot resistance at 1013.50, subject to the lesser resistance of a midpoint at 1002.50 .) The futures topped near 1015 on three separate days in the last two weeks, and a mere bluff is not apt to get past thoe tops without some frenetic short-covering to provide some cover.
Viewed on the daily chart, the apparent swiftness of the recovery from the plunge begun last Friday looks, well, unseemly, especially considering the steepness of the rally it was presumed to have been correcting. Couldn’t the bulls have waited for another day or two before leaping anew? Whatever the case, we can ill afford to ignore the fact that the futures slightly exceeded an important peak recorded last November before they took a breather. That is of course bullish, and the implications thereof will remain intact as long as the S&Ps don’t take a 50-point header next week.
If the futures rally into a narrow window this morning, pulling back from an intraday high anywhere between 14.155 and 14.195, use the pattern to get long at conventional point ‘X’, since you’d have pretty good camouflage. For your guidance, I’ve drawn in the coordinates and the hypothetical rally/pullback in the accompanying chart. _______ UPDATE: No dice, since the futures traded no higher than 14.070.
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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 Thursday
Let’s see if December Gold can make the modest leap to 950.70 today that is required to refresh the bullish trend on the intraday charts. Yesterday’s rally reversed a bearish impulse leg on the 180-minute chart, so we should be encouraged about the outcome. As of 12:40 a.m., the 15-minute chart was promising 948.00, provided the 941.50 low made three hours ago holds. Any decisive progress above that first number, a midpoint resistance, would hint of more strength to as high as 954.40.
Hidden Pivot Webinar & Tutorials
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How Quickly Could the Dollar Collapse?
by Rick Ackerman on August 20, 2009 1:07 am GMT · 20 comments
We popped up on the “wrong” side of the inflation/deflation argument here the other day with a hyperinflation scenario that seems to us not just possible but likely. Although we hold fast to a prediction that deflation is going to run its course, throwing tens of millions of Americans into bankruptcy, before relief comes to debtors, we are persuaded that at some point well down the road the U.S. will throw the switch to hyperinflate. Even so, we believe that the attendant collapse of the dollar will play out far more quickly than the » Read the full article