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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
The 1053.00 target remains shortable, stop 1054.25, but because this number has been loudly drum-rolled, you shouldn’t expect it to work as precisely as we have come to expect of E-Mini S&P targets derived from the hourly chart. Above 1053.00 the task of targeting becomes somewhat esoteric, but I’ll suggest using 1065.75 as the next possible plateau or top. Note to Harry et al.: The December contract target is 1048.25, and shorting there may be the way to avoid a traffic jam in the September futures.
Copper has pulled back beneath a key midpoint cited here earlier, so boarding for a ride up to as high as 3.0695 will be trickier. I’ll make this catch-as-catch can for experienced pivoteers only, since I cannot stay closely enough on top of this contract to provide a camouflage for entering. The chart shows one way in which it might be attempted immediately, bottom-fishing at the c-d midpoint of a retracement pattern.
We hold four Jan 130-Oct 130 put spreads with an adjusted cost basis of 2.50. That number reflects a $360 profit we booked yesterday on a September 170 call we’d bought for $200. The gain seemed ambitious at the time — it represented a 6300% annualized profit(!!!!!), in newsletter-speak — but it is only after one cashes out of such a position that Goldman’s 192.91 potential smacks one in the eye. That’s where I now think the stock is headed if it closes above the 175.05 midpoint. Incidentally, the September 170 calls traded as low as 0.67 on September 2, with the stock around $159. Whoever sold them at that price must have forgotten that when Goldman shares are rampaging, they can easily climb $10 in just a few days. I won’t beat myself up for suggesting that you buy just one September 170 call, but the lesson learned is that Goldman is the horse you should bet on if you think a two or three-day decline in the market is likely to be recouped.
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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 Friday
Immediate upside potential is to 177.18, a Hidden Pivot target where you can go short with a stop-loss as tight as 20-30 cents. If AAPL were to shred that resistance, we could be looking at 193.67 by mid-October.
Keep in mind the 16.940 target in December Silver that was disseminated earlier. Any progress above this number would be a very bullish sign going forward, raising the bar to a maximum 18.350 over the next 10-12 weeks.
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S&P Rally Nears a Key Benchmark
by Rick Ackerman on September 11, 2009 12:49 am GMT · 4 comments
We’ll know soon whether stocks are about to continue blithely higher, since the S&Ps are stealing up on an important Hidden Pivot target disseminated to Rick’s Picks subscribers a while back. Specifically, we projected a potentially important top in the September E-Mini S&P contract at exactly 1053.00. Yesterday, the futures got as close as 1044.00 before retreating slightly in after-hours trading.
The S&Ps and other broad indexes have now closed higher for five consecutive days, testing the resolve of bears while rewarding traders who have stayed with the bullish trend. » Read the full article