Monday, September 28, 2009

Goldman has taken a nasty dive from a peak that fell more than $4 shy of a potentially important rally target we were focused on. No one ever said it would be easy to short the little sonofabitch, but we'll keep trying. Just so you know what the incentive is, if you'd bought some October 170 puts for 1.40 when the stock was topping last week, you could have cashed them out for as much as 3.55 on Friday, two days later.

There are too many enticing downside targets at the moment to pick just one, but they'd all become moot if the futures were to reverse from the least important of them, _____,  producing a bullish impulse leg on the lesser charts.  A tiny peak at _____ will serve just fine to tell us when this may have occurred.

We hold 200 shares with an adjusted cost basis of 16.73. Shorting some option premium against them on the last run-up might have been warranted, but having missed the opportunity, we can take encouragement from the fact that Friday's high slightly exceeded the look-to-the-left peak at 19.46 recorded on the way down a day earlier.

Gold's two setbacks this year have averaged about 12%, which would imply a pullback to around $940. Would that be so bad? In any event, my worst-case correction target for the near term is _____, predicated on a breach of that Hidden Pivot support's midpoint sibling at _____. Friday's low exceeded the midpoint by just one tick, so we should view it as still intact. As always, interaction with these pivots will be the key to gauging the strength of the downtrend.  Alternatively, we should set the bar at _____ to alert us to a decisive, bullish turn on the hourly chart. 

The Dollar Index on Friday ended the day with a bounce from the exact midpoint support of the pattern shown in the chart. It would need to rally today to at least _____ to suggest bulls are back in charge. At that point they would be presumed capable of propelling DXY to as high as _____. Key resistance on the way up would come at _____.

Fasting and prayer for Yom Kippur, the Jewish Day of Atonment, begin Sunday at dusk.  In observance, I will not be updating touts or commentary for Tuesday, although the chat room will be open as usual.  To those of you who observe Yom Kippur, may you have an easy fast.