Wednesday, September 23, 2009

Please note that I still regard a Hidden Pivot target at 75.47 in the Dollar Index as a potentially important low.  If it's hit with Gold sitting near its 1029 rally target, that will be good reason to take heed.

December Silver appears to be consolidating above a Hidden Pivot midpoint at 17.150, and a close above it today would likely clinch a push to its 'D' sibling, 17.775 (or 18.155 if any higher).  Night owls could try bottom-fishing at 17.175 using a three-tick stop-loss.

With a rally target at _____, the little arse bandit hasn't given us much in the way of Hidden Pivots to bottom-fish. Nevertheless, we can attempt it this morning if the stock pulls back to _____ in the first 15 minutes, bringing the December 550 calls (GOPLY) into bargain range.  You should try to buy one of them for around _____, using a stop-loss at _____.  With the stock in such a strong rally, it will probably be easier to try and enter with-the-trend on camouflage; so if you are familiar with the technique, you should try to buy the call on the first ABC rally from near _____.

There are no DJIA patterns that I particularly like, but the whimsical rule-breaker shown in the chart will do in a pinch. I've decided to legitimize it because of the oscillations around the 9290 midpoint pivot, and also because the most recent phase of bear-rally hysteria launched from a low not far beneath it.  Anyway, the bottom line is a Hidden Pivot target at _____.  Although I wouldn't try to go short the world at that price, I'm pretty confident about using it as the first number above 10000 where I might believe a top could form.  One thing we can be nearly certain of is that 10000 itself will show no particular stopping power.  If such an occurrence were even remotely possible, the stock market would cease to be the engaging carnival that it is.  At _____, however, Dow 11000 would be a glimmer in bulls' eyes -- and Kudlow's wet dream.

I'll stick with the _____ rally target flagged in yesterday' s update, although a leisurely buy on a pullback to the _____ midpoint associated with that number does not appear to be forthcoming. The print at _____ would be a big deal, since, as noted here earlier, it would surpass a high at ______, refreshing the bullish impulse on the weekly chart.  That high is no less relevant because it occurred in thin trading, by the way. To the contrary, it is all the more legitimate as an "external" peak because it was recorded by the December futures, not by a continuous contract.

The update to yesterday's forecast caught the top of an entirely unremarkable session that was all noise and no conviction.  If and when this trading vehicle breaks out, look for confirmation of a _____ rally target by way of a stall at _____, its midpoint sibling. Alternatively, it would take a print at _____ to turn the hourly chart bearish.  

Our memory stumbles whenever we try to recall any recent sightings of “green shoots” that would support the officially promoted illusion of a U.S. economy in recovery.  Actually, this vision is more of a hallucination than an illusion, since one’s mind needs to venture beyond the pale of rationality, light years beyond the fringe of statistical evidence, to conjure up supposed signs of sustainable growth. Does “recovery” square with the reality that you, personally, see all around you?  Indeed, whatever picture the government and the news media want us to see will be unconvincing at best, since a hundred million Americans are each day living the anecdotal evidence that flatly contradicts what we are being told.  How many of the 50 million homeowners who are underwater on their mortgages, for instance,  jumped for joy when it was reported yesterday that home prices in the U.S. rose 0.3% in August?  Optimists would say it’s the trend that matters, but realists would point out that at that rate, it will take a decade for prices merely to return to where they were before the housing market collapsed. Someone in the Rick’s Picks forum said the news media were in cahoots with the government to sell us on the idea that America’s worst downturn since the 1930s has ended. Speaking as a former newspaper reporter and editor myself, I have a more boring theory -- that journalists are simply too lazy intellectually to pursue a story line that doesn’t perfectly fit the Administration’s script. With some cursory background reading in Econ 101, they could nail Greenspan and Bernanke to the wall for their lies and sometimes appalling economic ignorance. But that would be a far more difficult story to write than the ones that flow so easily from the government’s press releases and speeches. Journalists’