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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
The futures turned up tentatively after make a run at an 1155.00 downside target that was missed by $2.70. This is bullish as far as it goes, but it would take a print Monday night at 1168.90 to suggest that buyers are not terribly intimidated by the 1174.90 resistance pivot we’ve been using for so long. I’ve hung out a headline target at 1337.00 if it should get shredded, but I am not expecting this, at least not so soon after the lower pivot was achieved. Keep in mind as well that the futures could feint to 1185.50 without affecting the odds of a serious correction.
Yesterday’s nasty little short squeeze recouped last Thursday’s air pocket, bracketing the intervening day (i.e., Friday) as an altogether gratuitous, and hardly atypical, swoon. The rally was ”camouflaged,” strictly speaking, because it vaulted a bunch of prior peaks without getting past the important one at 1112.25 recorded last Monday. That number was three ticks shy of a 1113.00 Hidden Pivot target we’d been using for too long, and it rounds out a picture that explains in graphical form how a market with zero bullish buying interest can keep going higher, and higher and….higher. I’ve got an 1138.00 rally target we can use if this tedium should continue, but I won’t show you how I derived it because I don’t want to encourage bad habits in my students.
I drew a trendline a while back that showed a fearsome chasm opening up on the weekly chart, but it’s probably safe to draw a steeper line that will afford bulls an additional cushion if buyers should go derelict between now and year’s end. From a Hidden Pivot perspective, the outlook is heartening for the near term – tradable, even, by night owls, since a spear up to 18.675 has created a nice, but not too, impulse leg on the lowly five-minute chart. Points A and B are, respectively, 18.535 amd 18.675, but I’d suggest letting the first ‘X’ entry get stopped out before attempting entry.
A downside Hidden Pivot at 74.36 given here earlier is still usable as a minimum objective, although DXY doesn’t seem to be in any hurry to get there. Friday’s somewhat lackluster rally spike was impulsive on the intraday charts — with a little camouflage to boot — but the enthusiasm detumesced so quickly as to render the pattern moot. Ordinarily I’d say the interventionist are simply hanging out, waiting for the right opportunity to squeeze the buck higher. But the fact that there has been no intervention suggest the U.S. has not been able to garner the support it needs, at least not yet, to make a rally stick.
Let’s use a 105.45 rally target to get short. December 105 puts (DIAXA) would be a decent buy for around 1.57 at that time if you want to use a limit order, but that’s just a guesstimate, and because there is risk that you could miss the trade, I’ll make the order catch-as-catch-can (as opposed to a Pick of the Day that could be executed on autopilot). Officially, we’ll buy four Dec 105 puts if DIA rallies to 105.42. A 105.61 stop-loss is suggested. _______ UPDATE: DIA went no higher than 104.98 before diving, so we did nothing on the order (which you should cancel).
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Gold Can Impale Bears with a Leap Past $1174
by Rick Ackerman on November 24, 2009 3:35 am GMT · 1 comment
Having waited patiently since May for Comex Gold to reach an important target at 1174.90, we are naturally interested in what comes next, since the December contract peaked yesterday at exactly 1174.00. We say “peaked,” and while this is technically correct because a $16 selloff has ensued so far, that’s hardly enough pain to have sent gold bulls into fits of panic or despair. In fact, the selloff looks and feels like little more than a minor flutter in a bull market that presumably has much farther to go. Even so, we shall treat » Read the full article