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From the monthly archives:
September 2009
A heads-up: TBT is approaching a bearish Hidden Pivot target at 43.39 that would offer a back-up-the-truck buying opportunity if it is reached. This would of course imply that the price of the underlying long bond is approaching an important top.
Apple’s “story” has dimmed slightly with the recent announcement of dramatic price cuts for the firm’s high-capacity iPods. The news would probably be easily absorbed if the stock were trading at half its current price, but the rally in fact has looked like it needed a rest for the last 50 points. Accordingly, we’ll use a Hidden Pivot target not far above, at 193.87, to try and get short. We’ll have a better idea of whether the stock will actually reach that number once we’ve seen how far it pulls back from yesterday’s high. Anything exceeding 182.82 would indicate possible trouble. _______ UPDATE: 188.90 is as high as buyers could muster on the last rally peak. The target is still valid in theory, but we’ll put this trade aside for now, since it can only distract.
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The futures look pretty neutral right now. Notice in the chart how yesterday’s downtrend played out to within a single tick of a crystal-clear target on the 3-minute chart. Now, if the recovery rally hits or exceeds its target, bulls would be back in charge. _______ UPDATE (10:22 a.m.): Gold’s rally stalled a single tick above the 1019.40 target shown in the chart, and although I had said this would put bulls back in charge, I jumped the gun. In fact, Gold needed to have exceeded the Hidden Pivot — exceeded it by more than a single tick, anyway — to suggest there’s enough buying enthusiasm to take the futures to a new threshold.
In after-hours trading, the futures appeared to be struggling to reach the 1062.75 midpoint of a minor corrective pattern projecting as low as 1056.50. Either of these Hidden Pivots can be bottom-fished with a stop-loss as tight as 1.00 point, but if the trend reverses Thursday night or Friday morning, hitting 1070.00 before 1063.75, bears had better get out of the way. My immediate target thereupon would be 1073.00, but with a good shot at 1085.00 if it’s exceeded by more than 1.00 point. [Note: The interpolated over/under numbers for the December contract are, respectively, 1065.25 and 1059.00.] ______ UPDATE (10:14 a.m.): The futures have rallied from an overnight low the fell in-between the two levels of corrections targets given above. The move was impulsive, so that the pullback now in progress must be viewed as such rather than as the start of a significant downtrend. It would take a 1047.50 print to reverse bulls on the hourly chart.
Is the economy recovering? Nowhere is there more confusion on this topic than in the pages of the Wall Street Journal. Anyone scanning just the headlines might think we’re on the cusp of a solid rebound: retail sales are up, home sales are starting to move, and the Fed chairman thinks the worst is behind us. It is only when one burrows into the newspaper, particularly the op-ed pages, that a more sobering picture emerges. The facts well behind » Read the full article
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Google is too hot right now for us to play catch-up, but because we have a score to settle, we’ll be looking for any opportunity we can find to plunder the unwary. The stock appears bound for 553.87, opening up the possibility of our buying cheap vertical spreads near the 550 strike. The December spreads sell for a little more than three bucks, but we’ll want to pay no more than $1.50 or so. That will require legging into the spread, buy side first. Stay tuned, since the trade must be attempted when the stock is falling toward a Hidden Pivot retracement target.
Rick’s Picks Weekend Edition
by Stephanie DeMaria on September 19, 2009 12:01 am GMT
Two Possibilities Bulls Have Yet to Discount
We’ve always believed that the stock market’s ups and downs are driven not by anything so mundane as news events or the economy, but by the same mysterious cyclical forces that govern the physical universe. Nevertheless, two rapidly evolving news stories threaten to abruptly reverse Wall Street’s heedless bear rally, which recently entered its seventh month.
The first story concerns the impending collapse of the Obama presidency. Although he ran a very impressive campaign, Mr. Obama appears hell-bent on committing political suicide. The President is clearly obsessed with radically revamping the country’s health…
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Gold Just Messing with Bankers’ Heads
Gold hasn’t made much headway since the beginning of the month, when COMEX futures surged $50 in the space of two days. With the dollar suffering from the vapors, there’s no compelling reason why the December contract should have loitered near $1000 ever since. Granted, that’s a nice, round number, and it probably works smoothly with put-and-call hedges that allow bullion dealers to borrow as much of the stuff as they’d care to without risk. It is the same thing we see on expiration Fridays in the equity options market. When a stock gets “pegged” to a strike price, it’s possible for even small players to transact…
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Ben’s Pretty Sure Recession Is Over
It’s almost official: the recession is maybe, probably, technically over. Helicopter Ben said so yesterday, and who are we to argue? You can hardly blame the guy for having his head in the clouds, considering how retail sales absolutely exploded in August. Sure, it was due almost entirely to a cash-for-clunkers program that taxpayers have yet to pay for. But the program will have been a bargain if it helps foster the impression Americans are in a spending mood again. And if that’s all it takes to get the economy rolling, then by all means, let’s extend clunker status to everything else in America that clunks, starting with Iron City’s peerless clunkmeisters, the Pittsburgh Pirates. We’ll personally chip in a TV set…
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Dollar’s Next Rally Looks Doomed
Here are two numbers to jot down if you’re interested in gold and the U.S. dollar: 75.47 and 72.93. Those are our current downside targets for the NYBOT Dollar Index, and we are quite confident that both will be reached in the fullness of time. The first lies just 1% below yesterday’s settlement price of 76.28; the second, 4.3% below it. Like you, we’ve heard many compelling arguments from dollar bulls and bears. Some think it is about to turn very strong, while others see a collapse. Our gut feeling is that the bulls will be right…
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Which Recovery Story Are We to Believe?
Is the economy recovering? Nowhere is there more confusion on this topic than in the pages of the Wall Street Journal. Anyone scanning just the headlines might think we’re on the cusp of a solid rebound: retail sales are up, home sales are starting to move, and the Fed chairman thinks the worst is behind us. It is only when one burrows into the newspaper, particularly the op-ed pages, that a more sobering picture emerges. The facts well behind…
Read the Rest of the Article | Comments