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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
A fleeting lunge to 1073.00 Sunday night has refreshed the impulsiveness of Friday’s week-ending recovery rally, but it will now require a bit more of a pullback to recharge the futures for a strong follow-through. To be more precise, the futures will need to come down to at least 1060.40 (versus an actual 1065.40 so far) in order to be in the “window” for another leg up. Thereafter, it would take a thrust of at least 7.20 to get off the launching pad and be on track to reach a short-term high near 1090.
The downside target equivalent to the one I’ve provided for the Dow in today’s commentary lies at 1021.00, and I have trouble imagining that it won’t be reached sometime this week. The midpoint Hidden Pivot with which it is associated is now resistance, and it seems tonight to be containing whatever ebullience may have spilled over from Friday afternoon. I’d tout 1061.00 as a tightly stopped short if this were happening intraday, but there is too much feral activity on a Sunday night to risk it. However, pivoteers who can find camouflage enough to whittle the stop-loss down to just a few ticks are encouraged to give it a try, shorting with the microtrend.
The Dollar Index came within 0.10 points of reaching a longstanding target at 80.78 on Friday, and I’d be surprised if this Hidden Pivot fails to contain the rally for at least a week or two, if not significantly longer. The resistance is not chopped liver, as we sometimes like to say, and if it were to be easily swept aside, it would be warning dollar bears to dive for cover.
I was a tad greedy on Friday in having you hold out for a few more measly cents when the March 39 puts trade as high as 0.57. (Our short offer lay at 0.65.) The selloff that sent the puts soaring may have marked fear’s apogee for a while, so I’ll suggest offering the put short for 0.45 now, good-till canceled. We are already long one March 44 put with a cost basis that has been reduced to 0.23 by profit-taking.
Although we’ve been looking to short this rally, we’ll get out of the way for the moment, since the most promising trade I can foresee is a buy that would occur somewhat below these levels. The accompanying chart shows the Hidden Pivot midpoint that would spell easy, or at least low-risk, opportunity.
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Jitters Over Greece Quelled by…Lunch?
by Rick Ackerman on February 8, 2010 5:10 am GMT · 8 comments
The stock market’s miraculous recovery in the final two hours of Friday’s session could have made one lose sight of why stocks were down in the first place. Come to think of it, why were they down? Investors began the the day supposedly concerned about whether Greece might have to hock the Acropolis to buy time from creditors. Amidst all the nail-biting, U.S. shares fell hard in the early going. But when the selling began to dry up around mid-afternoon, DaBoyz squeezed shorts with the kind of viciousness we haven’t seen since the running of the bears in the weeks before Thanksgiving. And Greece? As the » Read the full article