I put out a shortable target at 993.25 in the chat room yesterday more than an hour before the close, but the futures went nowhere, and the absolutely lifeless action since has turned the pivot to dross; it is no longer usable. I’ve included a chart so you can see for yourself that, despite the tedium, there are still excellent opportunities to be had intraday. They can be found mainly on the lesser charts in instances where all of our Hidden Pivot rules have been met. In this case, we’ve got ‘em in spades: 1) A, B & C coordinates all etched by a single bar; 2) a quite subtle, one-off ‘A’; 3) an impulse leg that has quietly pushed past the required two prior peaks, and 4) a meandering C-D leg to keep other traders and technicians from recognizing the rules-based charm of the overall pattern. What we lacked was enough buying energy to get the futures to the target. Still, seven hours later, longs from the conventional point ‘X’ entry would still be in-the-black, if only slightly. _______ UPDATE (3:25 a.m.): With Asian markets getting sacked once again, the E-Mini S&P is discounting a potentially nasty opening. The futures have been down as much as 10 points so far tonight, hitting a low of 979.50, but the selling could continue to 958.50 or even lower if the 974.25 midpoint support asssociated with that Hidden Pivot gives way.
From the monthly archives:
August 2009
Goldman’s Friends in (Very) High Places seem to have cut the stock loose these last two weeks. We’ll know soon enough whether they’re just being coy, since there are two quite-clear Hidden Pivot supports not far below. They lie, respectively, at 156.34 and 153.57. Either number can be bottom-fished at your whim with the very tightest of stops, but you’ll be on your own if you fill.
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We took a flyer on this stock a while back and lost $200, but there’s a midpoint support where we can try again that will afford us better protection against risk. Bid 17.07 (3 cents above the actual pivot) for 400 shares, stop 16.97, day order.
I’d be tempted to recommend shorting a Hidden Pivot at 31.52 aggressively were it not for its close proximity to a visually obvious high at 31.63 made two weeks ago. Let’s try it anyway, very gingerly, by naked-shorting a single September 32 call (SYJIF), stop 31.64, if and when SKF gets within a six cents of the target. By rough estimate the calls should be offered for around 2.60 at the time, but you should try to do no worse than a price midway between bid and offer. _______ UPDATE (Aug 19): Let’s bag the short, since the pattern that yielded our target is getting a bit sloppy.
I’ve just mentioned in the chat room that the 13.805 target is still theoretically valid but unappealing as a place to try bottom-fishing, since the bounce from a somewhat higher low at 13.820 has gone on for so long. The futures would need to keep going all the way up to 15.550 to make a statement, but that appears unlikely because of the feebleness of the bounce so far. A bit of unexpected news could change that in an instant, but without it the futures appear to be headed lower — presumably to test a moderately important low at 13.370 recorded on July 31.
A print at 968.10 this week would be needed to turn the hourly chart bullish again; failing that, the futures could grope their way down to early July’s 907.60 low in search of support. Once beneath that low, it would take an uninterrupted fall exceeding 884.80 to do even minor damage to the daily chart. More immediately, the rally off Monday’s lows has shown no particular exuberance, having stalled at a 940.70 high that is two ticks from the highest target we could have projected using the lesser charts. (A=931.80, B=937.60 at 11:15 a.m., 5-minute chart.)
From our friend Levente Mady, who tracks and recommends bonds for Bob Hoye’s Institutional Advisors, here’s a tactic you can use to beat the high cost of gasoline. (He is responding to a post in the forum by a concerned reader):
“If you are worried about the price of gasoline, you should convert your car to run on propane. If you look at the price relationship between crude oil and natural gas, it should cost you about 3.5 times less to fill up with propane than with gasoline these days. In other words, if it costs you $100 to fill up your car with gas, you can get the same amount of mileage for less than $30 of propane. There is hundreds of years’ worth of natural gas supply in North America. It is dirt cheap! It is clean! Why not put it to good use?
“A bit of background in terms of practicality: the technology is there and it costs $3,000 to $5,000 to convert a larger automobile (SUV or truck) to run on propane. Obviously, natural gas is the cleaner fuel and there is a massive abundance in North America — that is why it is so cheap. As a matter of fact, some states – Arizona, for example – provide tax credits for the conversion expense as well as for running the car on propane instead of gas. Uunfortunately right now there just does not seem to be much talk about using natural gas as transportation fuel. Natural gas is supposed to be used more or less exclusively for heating. The choice fuels for transportation are crude oil derivatives (diesel, gasoline, jet fuel, etc.).
“The silly thing is that there is a ton of money spent on non starters that are decades away from making economic sense for the average driver, such as electric and fuel cell technology. Meanwhile, America’s energy dependence on shady foreign powers could very easily be cut in half by utilizing existing technology to replace crude oil with natural gas in the transport sector. But that is just too simple, so there is no way the government would ever make a real push for it. Cash for clunkers – yessss! Cash for propane conversion – it makes sense, so not likely!”
The darned thing did practically everything a bear could have asked of it yesterday –except continue to fall after the overnight lows got taken out. What could account for sellers’ apparent faint-heartedness when they had bulls on the ropes? Lack of conviction? More likely it is fear that was lacking, although we shouldn’t rule out its emergence this week, since it could easily start to snowball if the futures fall even moderately over the next day or two without finding good traction. Night owls will find scant camouflage if the futures pop above 988.00 in the wee hours, since this seems likely to excite enough buyers to necessitate our entering after the first point ‘C’ has been stopped out. I have sketched this scenario in the accompanying chart for your guidance.
Hyperinflation Won’t Be Like Germany’s
by Rick Ackerman on August 19, 2009 1:16 am GMT · 5 comments
I thought I’d overdosed on the inflation vs. deflation debate, but that was before I started reading Adam Fergusson’s When Money Dies: The Nightmare of the Weimar Collapse. Fascinating stuff. Anyone who thinks it couldn’t happen here is right in one respect: It won’t take ten years to play out in the U.S., as it did in Germany. Far from it. My guess is that our own hyperinflation nightmare – and we will have one once deflation has had its way with all who borrowed more than they can ever pay back — will be over within ten » Read the full article