Friday, October 2, 2009

DXY appears to be consolidating above a midpoint pivot at 77.11 for a push to its 'd' sibling, at least: 77.73.

Bid 94.71, stop 94.66, for 200 shares.  Our bid is a penny above the 'd' target of a sausage-y pattern, but the abc (a=99.16 on the hourly chart) is otherwise so whacky and obscure as to be mildly compelling. You'll be on your own if the order fills. _______ UPDATE (9:13 a.m.):  The Diamonds are indicating a gap-down opening this morning near 94.18, so this trade obviously won't work.  Cancel the order.

The futures blew past a 122^22 target, but there's another at _____ that in retrospect looks too compelling to have been overlooked (see chart).  I expect it to show tradable, and precise, stopping power; but if not, and the Hidden Pivot yields easily, the futures would be signaling more upside over the near term to _____, the highest number I can project without stretching my imagination.

The Hidden Pivot support at 1025.75 given here yesterday worked well, since it caught the low of a 25-point decline within 1.25 points. Now that it has been exceeded, albeit only slightly so far, we should use a Fibonacci-based support at _____ as a minimum downside target. Alternatively, an upside thrust that surpasses _____ would hint of a bullish turn to end the week (and quarter).   

The squiggle at 1011.80 that I mentioned appears to have worked as an "external" peak , since it closely contained rally attempts during each of the last two sessions. The price peaks thereof are sufficiently developed at this point to negate the importance (and usefulness) of our knobby benchmark, so we'll revert to an earlier forecast that said gold would struggle to little avail for perhaps 7-10 days before attempting a push toward an important Hidden Pivot target at _____. We're about halfway through that period now.   

Clueless commentators attributed yesterday’s stock-market selloff to weak manufacturing data and supposed fears over job numbers due out Friday. What poppycock! The pundits would have gotten closer to the truth if they had cited sunspots or unusual seismic activity at Yellowstone. Shares plummeted for the simple reason that they were ready to plummet. Think back to March, when this bear rally began. Since then, when have traders evinced even a twinge of fear over economic data?  In fact, they have ignored a steady stream of appalling economic news in order to obsess over a statistical recovery so ephemeral that it barely qualifies as a mirage. What has “recovered,” mainly, is the stock market, which is in the throes of one of the most powerful bear rallies since the Great Depression. Some other green shoots sprung entirely from the imagination:  a blip in retail sales attributable to the cash-for-clunkers giveaway; a blip in consumer spending – again, credit the clunkers; a blip in home sales that reflects the success of auctioneers, not Realtors; and a blip in home prices that is more dead-cat bounce than prayed-for inflation. Not Rocket Science Concerning yesterday’s broad plunge in the averages, it doesn’t take a rocket scientist to discern its cause. Just look at the chart above. The quote from our friend Garrett Jones, Bay Area forecaster, says it all:  The rally from the March lows has been so extreme that it was bound to correct when it reached the upper threshold of its price channel.  This is what we meant when we said stocks plummeted simply because it was time for them to plummet.  The mood of investors has changed, and with it perceptions of the news. For the last seven months, as far as Wall Street was concerned, all news was good news.  Now,