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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
The 1053.00 target given here yesterday remains valid, but the bullish case for the near term was weakened by the fact that all of yesterday’s action took place below a 1027.75 peak recorded on the way down a week ago. Because the plunge from that peak would have trapped many bulls, we should regard it as daunting if not impermeable. If the futures take a stab at it today, the effort should be considered ineffectual unless it exceeds the look-to-the-left peak at 1031.00 recorded on August 30.
Yesterday’s breakdown was serious, although I’d stipulated that DXY close for two consecutive days below 77.54 before we assume the worst. Tentatively, however, we’ll look for a quick drop to at least 76.05, or to 75.57, the Hidden Pivot given here originally, if any lower. My worst case number for the period preceeding the G-20 meeting in Pittsburgh at month’s end is 72.93. My hunch is that such pronounced weakness in the dollar is unlikely ahead of the meeting, but if it comes, stocks are going to fall too, and steeply.
Silver’s most recent peak at 16.860 fell 8 cents shy of a clear Hidden Pivot at 16.940, so we should assume the December contract has at least a little further to go before it hits something solid. Position traders should consider lightening up, with the goal of replacing on the pullback any shares sold near the target. If the futures close above 16.940 for two consecutive days, or trade more than 10 cents above it intraday, that would be a very bullish sign going forward.
Yesterday’s patently spurious plunge should look more like a swoon by Wednesday mid-morning, when I expect gold will have recovered. The sell-off was very obviously caused by the nasty bull trap that ran stops placed slightly above a 1008.80 high made shortly after 4 a.m. In a bigger picture, the 1074.50 target given here earlier remains valid, although I should introduce another, lesser one at 1016.60 that looks capable of showing some stopping power. The less stopping power it displays, the more quickly and powerfully the next thrust is likely to develop.
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Wall Street did not exactly take Apple out to the woodshed following yesterday’s revelation that the firm has paid little or no taxes on foreign income of $75 billion. The stock flinched, down $2.73 on the day, but investors seem to recognize that revising 275,000 pages of tax code to force Apple to pay its fair share will require many years of wrangling on Capitol Hill. And who’s to say that the effort would not leave other loopholes just as easily exploited by the Sunnyvale behemoth’s clever lawyers and accountants?
Technically speaking, however, the news seems to have sapped some of Apple’s vital juices, since the stock failed for the second consecutive day to decisively exceed a small but nevertheless significant ‘external’ peak at 445.36 (see inset). That feat, trivial though it may seem, will remain crucial to the short-term picture. If and when it is achieved, expect the stock to rise to a minimum 449.9o, a Hidden Pivot target. If the pivot is easily surpassed, look for the bullish momentum to continue till week’s end, at least. Camo traders should position from the long side, using the 15-minute chart for leverage.
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Yesterday’s rebound in this vehicle was strong, although not quite as compelling as the one in Comex Gold futures. Moreover, the intraday low exceeded the midpoint support of the pattern shown by a decisive 52 cents, shortening the odds that its ‘D’ sibling at 22.25 will eventually be reached. We’ll give bulls the benefit of the doubt nonetheless, since mining shares are unlikely to languish if they catch their first whiff of strength in bullion in many months. From a Hidden Pivot perspective, this vehicle needs to keep running without taking a breath until 29.83 (a 5/14 peak) has been exceeded. Camouflageurs should look for entry opportunities on the 15-minute chart, since there are some choice ‘externals’ to be found therein.
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Tesla got short-squeezed to within 28 cents of the 86.72 target I’d proffered early Monday morning, but a second-wind rally to 88.00 suggests it’s got eyes for 104.44, the ‘D’ target associated with the first number. It can serve as a minimum upside objective for now, implying that all trades between here and there be positioned from the long side. We’ll plan on buying weekly puts if and when the target is reached, provided it happens before Wednesday of the given week. Please note as well that a lesser Hidden Pivot at 94.19 (see inset) has the potential to stop the rally cold and can therefore be used for spec camouflage shorts.
All signs point higher at the moment, but even Google will have to top somewhere. My best-bet for a short-able apex is 929.78, the Hidden Pivot target of a well-defined ABCD on the monthly chart (see inset). You can try shorting with camouflage at that number, or at the D target (in purple) of the lesser pattern, but until then all trades should incorporate a bullish bias.
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SIDE BETS for Wednesday
A minor Hidden Pivot resistance at 10.57 is the nearest impediment, but if UNG gets past it and a peak at 10.75 made in late August on the way down, it would be clearing the path for yet more upside. The implications will not affect the daily chart, however, until 16.27 is touched.
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Jubilant Traders Miss Another Ominous Sign
by Rick Ackerman on September 9, 2009 12:01 am GMT · 7 comments
Yesterday morning, an hour into the new trading week, we covered a small short position in the Diamonds, booking a loss of $92 on some September put options. This speculative bet, initiated on the closing bell Friday, was inspired by a hunch that if Mr. Market really wanted to catch investors with their pants down, the Tuesday after Labor Day would be a perfect time to do it. Alas, even with news that should have been helpful in catalyzing a stock-market plunge, stocks trudged higher. The news concerned consumer credit, and it could have left no doubt about the dire condition of the American consumer. He in fact » Read the full article