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COMMENTARY for Tuesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
Yesterday’s seemingly strong rally was all bluster when viewed on the daily chart, since it surpassed not a single prior peak of significance. In fact, it looked like a weakling on the hourly chart as well. So that we don’t miss a sign of real strength this morning, let’s set a benchmark at 1103.75. A print at that price would create an unambiguously bullish impulse leg on the hourly chart. More impressive still would be a print at 1119.75, since, once above that price, the futures would become a lead-pipe cinch to test supply near 1140.00.
Yesterday’s rally was impulsive, since it surpassed two “internal” peaks and one external on the hourly chart. In this respect, the stock was stronger than the market as a whole, and it could lead the averages higher if the buying tempo picks up. That would take a print today above 544.40, the midpoint resistance of the pattern shown in the chart. A close above that Hidden Pivot would hint of more upside over the near term to as high as 550.46.
The Euro has been frozen in a narrow range for the last half-day, as if gathering energy for a move. It is hovering just below a cluster of external highs on the hourly chart, meaning that the already-bullish tone of this market could intensify quickly. A print above the highest of these, at 1.3840, would not only be very bullish but would cancel two daily patterns with targets at 1.3398 and 1.3344. Until and unless that happens, committed Euro bears have something to shoot for. ______ UPDATE (01:27 a.m. EST, Feb 18): Committed Euro bears carried the day. The beleaguered currency failed to take out any of its key hourly highs and instead plunged to a level near its low for the big move that began above $1.50. The targets below $1.34 were not reached but remain in play.
A small, elegant pattern on the hourly chart points to a hidden pivot at 1.1024 which can be bottom-fished. A buy at 1.1025 with a stop at 1.1019 would risk a theoretical $75 per contract. If the yen moves substantially lower, it should find support at a hidden pivot of 1.0903. ______ UPDATE (07:42 a.m. EST): We were filled on our 1.1025 order, after which the market bounced to as high as 1.1036. We had time to move stops to breakeven, but profit potential was small, so let’s call the trade a wash. The D target and subsequently the round number of 1.1000 were breached, suggesting that the 1.0903 midpoint pivot from a large daily pattern is now in play.
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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.
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.
No Easy Way Back for U.S. Economy
by Rick Ackerman on February 16, 2010 12:01 am GMT · 23 comments
We wrote here the other day that once the bailouts and misguided stimulus attempts fail, the U.S. will have to start from the ground up to rebuild the economy. “But what mechanism can be used to bring back all the manufacturing jobs lost to China, Mexico, Taiwan over the last twenty years?” a reader asked in the forum. “It seems 80 percent of the population wants common-sense solutions, but the political meat grinder has its own agenda.” We replied as follows:
We’ll need to find our way back by producing services and goods that yield a comparative advantage for U.S. labor globally. That advantage would exist today if, since World War II, we had saved and invested most of our capital rather than consumed it and gone deeply into debt to live beyond our means. With Japanese levels of savings and investment, U.S. manufacture of steel, cars, clothing and such would be competitive with the most efficient producers in Asia and Latin America, much as our ability to grow and process corn — » Read the full article