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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
Our key bellwether has bounced robustly from Wednesday’s lows, although it did not quite come “roaring back” as the stock has done so many times in the past. That said, the afternoon stage of yesterday’s rally was strongly impulsive, since it surpassed three peaks, including the required “external”. That implies that any pullback from the next peak would be a screaming buy. Hidden Pivot aficionados might be interested to know that the impulse leg is not as powerful if you display it on the hourly chart. That’s because it changes the values for #2 and #3 tops so that they are equal. In that light they would both be “internal” highs, and so the rally would not qualify as truly impulsive.
The futures turned and burned after faking weakness in the early going, rallying 22 points from low to high. Impressive? Not really, since buyers didn’t have to push past even a single external peak on the intraday charts. We’ll hold our enthusiasm in reserve pending the completion of a bullish pattern that projects to 1106.25. If you’re looking for camouflage entry opportunities Thursday night or Friday morning, I suggest using the two labeled peaks for cover. An impulse leg ‘B’ falling between those peaks would be just about perfect, although you’ll probably have to be nimble to get on board with a buy-stop. _______ UPDATE (12:51 p.m.): The pattern is playing out as illustrated (although there was no reason to expect this; the illustration was intended as a “what-if” map), yielding an entry at 1094.50, a stop-loss at 1093.50, a 1095.25 midpoint, and a ‘D’ target at 1096.50. _______ FURTHER UPDATE (10 a.m,. EDT): The fact that the futures couldn’t even reach the 1095.25 midpoint of the puny rally pattern I’ve referenced telegraphed the weakness on the opening. This weakness was impulsively bearish on the 15-min chart, by the way, but that was not telling us much.
The pogo-stick bounces from moderately important Hidden Pivot supports have not been able to sustain loft, hinting of still lower prices to come. As a result, although short-term lows have been precisely predictable, bottom-fishing has yielded gains only to scalpers. The 72.93 target given here earlier is still where I think DXY will get traction, but here are two lesser pivots you can use in the meantime as minimum downside objectives: 74.36, and 73.79. Either can be bottom-fished with a very tight stop-loss, but as always, a decisive breach will indicate more downside to the next.
There’s a promising Hidden Pivot resistance at 101.79 where we can attempt to get short. Buy two December 100 puts (DIAXV) if the stock rallies to within three cents of the target, and place a stop-loss at 102.01. I estimate that the puts will be trading for around 2.45-2.50, if you want to use a limit order. ______ UPDATE: The Diamonds never got higher than 101.20 on the last thrust, so we’ll scrap the offer.
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Banking ‘Talent’ Has Nowhere to Go
by Rick Ackerman on October 23, 2009 1:47 am GMT · 13 comments
With draconian pay cuts looming in the banking industry, the last thing we’ll have to worry about is mass defections of talent. In fact, the financial sector is deflating these days as fast as the Heene’s balloon, causing the number of job openings for “financial products” specialists to shrink by the hour. How times have changed! Just a few short years ago, Ken Lewis, Bank of America’s recently deposed CEO, might have taken his whole team of traders and MBAs and started a new bank. These days, though, they’re a glut on the market. About the only place the leverageurs are getting sympathy is on the op-ed page of » Read the full article