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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The micro-spasms that have been inching this brick toward 1146.50 have proven too difficult to trade, even applying the most deftly leveraged camouflage. The 1146.50 target — pronounced “eleven-forty-six-point-five-oh” by South Jersey natives — seems about as certain as the next high tide at Fundy, but you’ll probably do better shorting there with a three-tick stop-loss than attempting to jump aboard at these levels. One daring way to do this would be to hang out an 1146.50 offer on the opening and hope for a short squeeze in the first 10-15 minutes of the session.
The delicate precision of the pattern shown in the chart, coupled with DXY’s bounce exactly from a Hidden Pivot midpoint at 77.45, lends authority to the 76.91 target associated with the midpoint. That’s where we should assume this correction is headed, at least, but if DXY falls any lower it would be signaling more weakness over the near term. Alternatively, a pop above 77.64 would hint of a turn even if it won’t negate the downside target.
The rally, now entering its third week, refreshed the bullish trend yesterday by surpassing an obscure, look-to-the-left peak that is visible on the hourly chart. However, buyers evidently were not feeling feisty enough to take on several more daunting peaks mentioned in yesterday’s analysis. My hunch, based on the shallow pullback Wednesday night, is that they will do so today. This is a great opportunity for bulls to pin shorts on the ropes, since once GC is above yesterday’s high, it will need only a six-point thrust to spear three (!) external peaks.
The futures are playing cat-and-mouse Wednesday tonight, feinting sharply higher, then pulling back even more sharply. The important thing to consider is that the peak of the head-fake took out a cluster of highs made on the way down a month ago, creating an impulse leg with bullish implications that will remain intact unless this sell-off dips below 17.770.
Google has plunged nearly $30 from within 28 cents of our most recent rally target, decisively exceeding a 606.77 midpoint support with a ‘D’ sibling at 599.09. That’s where the stock is now headed, having crashed the midpoint, so you should be ready to bottom-fish there with a stop-loss as tight as you can handle. If the order fills and survives, please let me know in the chat room so that I can establish a tracking position for your further guidance.
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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.
This Just In... for Thursday
Here’s the latest dispatch from our friend and long-time subscriber Jonathan Auerbach, whose NYC-based brokerage firm, Auerbach Grayson, makes markets in some of the world’s most exotic places:
”As I peruse this morning’s Pakistan headlines I am truly relieved that there are no new suicide bombings listed, nevertheless we do have announcements of drones, terrorists killed, militants apprehended,compounds cleared in places like Swat and Waziristan; to add to this Dante-esque litany of hourly dismay are moments of keystone kops absurdness such as a protest by the US Ambassador today to the Pakistan Ministry of Foreign Affairs to cease ‘provocative actions” of stopping cars, driven on behalf of US officials, carrying bogus license plates.’ Kind of makes you want to howl… what are we doing there? If you are not yet completely worked up and shouting, let me take you slowly down from the ridiculous to the sublime and the chaos of Pakistan to calmly address the IPO of the Fatima Fertilizer Company which plans a dutch auction on the Karachi Stock Exchange next week of 150 million shares.
“The offering will be conducted as a transparent ‘book building’ with a minimum price of PKR 10. At that price the aggregate value of the offering would be ~$23 million and the market cap of the company ~$230 million. We expect the price to be higher than the minimum. If you want to pariciapte as a US institution you must be a QIB since we shall rely on Rule 144a on placing the shares. We can provide you today with an offering circular and a summary of the company’s activities. We have scheduled a conference call with company management for tomorrow morning at O830. If you decide to bid on the shares you must arrange for a deposit margin to be escrowed at the exchange and clearly you will need a local custodian or have us arrange one for you. If you are interested please contact me or Anshuman Ray of our Southern Asia desk.”
…because Pennsylvania has just voted to allow table games. Here’s how my friend Glenn Klotz wrote it up at AtTheBeach.blogspot:
“More terrible news for Atlantic City. The Pennsylvania House of reps. in Harrisburg passed Table Gaming for Pa., Casinos! The next step will be the Delaware River Casinos in Philly. What this means for AC is more market share lost for our 11 casinos precisely when they can’t afford anymore losses. What it really means is the gambling experiment for redevelopment is essentially over. The results are for everyone to see. I’ll leave it to all of you to judge whether the 30+ yr. experiment to use casino gaming was a success or not?”
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on Feb. 29th - Mar. 1st. This two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register, click here.
Bunny-Slope Rally Lulls the Herd
by Rick Ackerman on January 7, 2010 4:20 am GMT · 5 comments
The broad averages are not so much climbing a wall of worry as ascending a bunny slope of indifference. The result has been a bear rally so tedious that tape-watchers risk death by apnea if they should fail to jiggle their limbs at regular intervals. However, the rally has been just about perfect for traders and investors who use covered writes, selling near- or out-of-the-money call options against stock they own. This strategy can be a loser if shares rise or fall precipitously. However, when they ascend a slope as gentle as the one » Read the full article