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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
Apple topped yesterday within a whisker of a 213.58 Hidden Pivot, but the 231.00 target of larger pattern looms not far above. We can use it as a minimum upside target, buying two January 230 calls (AJLAY) for 1.00 or better to speculate on the possibility of an explosive rally at the start of the New Year. If one is coming, Apple (and GOOG) will surely lead the way. This is not an exhortation to buy a hundred call options — just a whimsical, nickel-and-dime play that offers much better odds than a lottery ticket. _______ UPDATE: We bought two calls for 1.00 as the stock was detumescing following a short-squeeze on the opening that lasted for all of about 90 seconds. DaBoyz have since manipulated the calls much lower to cover them, so let’s bid 0.52 for two more, and 0.42 for another two, good for the rest of the week.
The correction from last Tuesday’s peak should turn from 77.44 or higher if bulls are to resume their dominance. That would become instantly true if DXY were to pop above 77.99 today. Traders looking for a place to bottom-fish can use a 77.02 target — my worst-case low for the near term, but also the spot with the best odds for speculative buying. _______ UPDATE: DXY has surged today, but the rally peak has thus far failed to take out the look-to-the-left peak at 77.99 mentioned above. Bulls are obviously in charge, if noticeably lacking in guts.
Six weeks of gratuitous chop has taken the fun out forecasting this vehicle, but I’ll mention a 10,728 minimum target nonetheless, in case you were wondering. That’s a Hidden Pivot resistance, and it’s been the rally bet since November 16, when a breakaway thrust tripped an alarm at exactly 10,310
The futures have pulped the 116^20 downside target given here a couple of weeks ago and now appear bound for at least 113^13. The bonds could catch a bounce on the way down from 114^17, the Hidden Pivot midpoint of a long-term pattern, but if it gives way easily, that would shorten the odds that the lower target will be reached sooner rather than later.
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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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Is Decline of U.S. Manufacturing Exaggerated?
by Rick Ackerman on December 29, 2009 2:36 am GMT · 40 comments
We usually think of America as a has-been in manufacturing, so the graph below may come as a surprise to some readers. It was sent to us by our friend Brad, who likes to play devil’s advocate whenever we go over-the-top with some outlandishly bearish prediction about the economy. The graph itself accompanied a recent article in National Affairs, “Keeping America’s Edge,” by Jim Manzi. America’s apparent decline in manufacturing is a claim that has been repeated so often that few would think to challenge it. The U.S. used to make real “stuff,” according to this argument, but now it no longer does. What this graph shows, according to comments at Manzi’s blog, “is that this claim is at best » Read the full article