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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
Yesterday’s fright-wig plunge didn’t even qualify as impulsive on the hourly chart. The reason is somewhat technical, and I’ve attempted to explain why in the accompanying chart. However, the fact that sellers failed to do their worst is no reason to celebrate, since they could easily return today in greater numbers to finish the job. There are two Hidden Pivot supports below that we can monitor to get a sense of how determined the sellers are: the first lies at 1117.60; the second, its ‘D’ sibling, at 1102.80. The lower support looks like a more conservative play for bottom-fishing, since the higher number coincides with a bunch of lows recorded a week ago. Alternatively, the most bullish thing I could see happening over the near term would be an upthrust touching 1138.80. That would create a bullish impulse leg on the very lesser charts, and with it the possibility of some base-building into week’s end.
March Silver should be presumed bound for at least 18.120, a Hidden Pivot support, but any lower would put its ‘D’ sibling in play: 17.890. Both numbers can be bottom-fished with a stop-loss as tight as three ticks, but because the futures fell so steeply yesterday, I wouldn’t advise getting in front of the move too aggressively. Alternatively, it would take a pop today exceeding 18.495 to turn the 5-minute chart bullish.
With punk earnings from Alcoa as an excuse, it should have been a piece of cake for DaBoyz to execute a vicious shakedown yesterday. Instead, valiant sellers struggled for yardage with the Dow down barely 100 points but gained only tough inches. With nowhere else to go, the averages swung around, recouping more than half the day’s losses by the bell. They were presumably in good position to put the squeeze on bears yet one more time on Wednesday. If that happens and you hanker to play, I’ve sketched out a path of excellent camouflage for you to follow in the accompanying chart.
A 586.08 target broached in the chat room Tuesday is still my minimum downside target for this correction. It is a Hidden Pivot midpoint, but if it is breached decisively we should infer that its ‘D’ sibling at 567.71 is in play. This matters because Google was a market leader in December, one of the few companies that seems able to make money hand-over-fist in a very tough economy. By implication, it would be bullish for the market as a whole if Google were to reverse and push above 611.39 this week without having reached 586.08.
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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 Wednesday
Here are some timely and very interesting observations concerning gold from our friend and longtime subscriber Jonathan Auerbach of Auerbach Grayson:
“Occasionally I write a column about gold trading to a much smaller audience than the E B&P crowd. For background I have a COMEX seat and regularly trade gold. So this morning I want to share with you my morning gold notes over what I believe was a prodigious confrontation yesterday in the pits…. Don’t waste your time this morning reading the pundits on where gold is going…yesterday was an epic battle in the pits between good and evil, bulls and bears, bullies and sissies, and ultimately concerted efforts at manipulating markets. The various legions that attacked and counter-attacked over the day turned over 215,000 100 oz contracts…the equivalent of $25 billion.
“Yet at the end of the day despite gold being down at one point more than $30 from the earlier daily high little technical damage occurred and we look forward to seeing final open interest on Friday. The sellers played the knee jerk card suggested several days ago here that the interests of certain parties for a successful UST auction would not be met if gold’s recent robust recovery continued. So get yourself a ringside seat for this morning’s thrilla to see if the sellers have the guts (they couldn’t have conviction) to face the buyers who keep getting up. Never forget the Auerbach Doctrine…You can only manipulate a market in the direction it wants to go.”
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Failed Sam’s Club Leaves a Big Hole
by Rick Ackerman on January 13, 2010 3:11 am GMT · 13 comments
Although the Boulder, Colorado area where we live has been spared the Great Recession’s worst ravages so far, an unprecedented number of local businesses have nonetheless gone under in the last year or so. We’ve grown used to seeing our favorite restaurants fail one by one, and we’ve even accepted the likelihood that only a relative handful of independent restaurants and retailers will survive these hard times. But Sam’s Club!? We’d thought the warehouse club’s sales would remain rock-solid in hard times, but apparently not. Yesterday, the parent company, Wal-Mart, announced it’s shutting down the Louisville, » Read the full article