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.
From the monthly archives:
December 2009
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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.
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.
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.
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.
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.
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
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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