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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
Gold was having trouble Sunday night sustaining a modest short-squeeze leap recorded when trading began. Sellers were not having much success either, however, suggesting things could go either way. A minor breakdown would likely test support at 1104.10, a Hidden Pivot, but if buyers are going to take charge, the turn should come from no lower than 1106.90 (its midpoint sibling), give or take a couple of ticks. An upthrust exceeding 1122.50 today would clinch the bullish case for the near term, but that benchmark lies a tad beyond the nearest Hidden Pivot rally target, 1118.00.
The 1146.50 target proffered here last week implies the futures will rally at least 26 points between now and New Year’s Eve. A lesser target at 1132.50 is still short-able with a stop-loss as tight as 1.00 point. However, trading the rally to that number is preferable, even if it will not likely br possible to do so with risk:reward fixed in the 1:3 ratio that guides all of our trades. Another way to look at it is that the rally is likely to continue pulling back by at least several points following each new marginal high of 1.00 point or so.
Friday’s peak at 46.01 fell within 0.01 points of the 46.00 Hidden Pivot I’d flagged, but as is so often the case, the target was hit in the final minutes of the session. Shorting there under the circumstances would have been particularly risky, but in any event, I never advise taking a position unless there’s enough time to nail down a profit by the close. Officially I’ll assume nothing done, but we can plan on shorting the last of the three targets, 46.91, if and when it’s hit. With any luck, this will occur other than on Thursday with three minutes left before 2009’s final bell. _____ UPDATE: 46.28 was as high as the little devil got, so we did nothing.
Friday’s thrust was encouragingly impulsive on the hourly chart even if it didn’t quite reach the 17.605 threshold I’d flagged. That seems likely to happen today, but we’ll raise the bar somewhat, to 17.915, to determine whether the rally is the real deal or just a titillation. A move past that last number would breach two external peaks on the hourly chart, the second of which occurred on December 9.
Expect Google to climb to at least 629.79, but don’t get bent out of shape if you can’t find a way to board the rally in a manner that does not expose you to unacceptable risk. Camouflage will be most difficult to find as the stock continues to bound into outer space in spectacularly uncorrected fashion. We might have expected no less, since Google continues to make money the old-fashioned way, and to keep its edge through innovation and shrewd acquisitions.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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Green-Shoots Mirage Turning into Delirium
by Rick Ackerman on December 28, 2009 2:37 am GMT · 8 comments
With recent reports of a resurgence in manufacturing and employment, the mirage of “green shoots” conjured up by Obama’s spinmeisters and hyped by a credulous news media has mutated into full-blown hallucination. Check out this upbeat headline from Saturday’s edition of the Wall Street Journal: “Manufacturing, Job Market Show Progress”. This follows on the heels of an equally surreal story in the Journal a few days earlier suggesting that the yields on Treasury bonds are rising in order to discount a recovery that » Read the full article