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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The futures are down about nine points – equivalent to around 70 Dow points– shortly after midnight. As I noted here a few days ago, when DaBoyz let stocks slide at night, their goal is to find a level at which selling dries up. Then they’ll suck up whatever shares come in for sale overnight, but lower their bids if bearish momentum picks up before the opening. Most of the time, unless there’s awful news to trigger an avalanche of selling on the opening, these operators will succeed at exhausting selling before the bell. It is for that reason that we should maintain a bullish bias for Thursday. However, if the decline were to exceed the two prior lows shown in the chart, that would be warning of more downside to at least 1088.50, a Hidden Pivot you could bottom-fish with a stop-loss as tight as three ticks. Alternatively, the futures would need to touch 1107.75 today to turn the hourly chart bullish. _______ UPDATE (1:30 p.m. EST): The futures noodled around the 1088.50 support for 20 minutes without showing much lift, so exit would have been on the stop, generating a trading loss of about $38. The eventual low was at 1084.50,suggesting that still lower lows lie ahead.
The futures look bound for 1073.20, a Hidden Pivot support whose provenance is shown in the chart. Price action Wednesday night would appear to corroborate this, since gold is presently bouncing from a low four ticks beneath the target’s sibling midpoint, 1088.90.
March Silver will have a chance to turn from 15.485, a Hidden Pivot support that can serve as our minimum downside target for now. But if there’s no bounce, brace for more slippage over the near term to as low as 15.255. Alternatively, it would take a rally exceeding 16.195 to turn the intraday charts bullish once again.
The Dollar Index is moving effortlessly above the 80.98 pivot that halted Tuesday’s powerful rally, implying more upside over the near term to as high as 81.78. A pullback from that number appears likely because of the precise pullback that has already occurred at the C-D midpoint , so currency traders might look to get long the euro with a tight stop if and when the turn comes.
We hold seven April 42 puts for an average 1.05 and a March 44 put for 0.23. Let’s try to trade against the position today by bidding 44.35 for 200 shares , stop 44.29. Our bid lies two cents above a promising midpoint support on the hourly chart (where A=44.87). If you hold no position, you can open one for a scalp. ______ UPDATE: The Cubes opened on a gap well below our bid, so the order went unfilled unless you executed it before the regular session began. That would have generated a very small trading loss of about $12 plus commissions.
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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.
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Stocks Waft Higher, Oblivious to Reality
by Rick Ackerman on February 25, 2010 3:49 am GMT · 9 comments
Stocks are in a warp now, moving in a parallel universe with no apparent connection to the observable world. The worst housing news in nearly 50 years pushed shares lower for a relative blink of an eye yesterday, then it was back to the races after Helicopter Ben affirmed for the umpteenth time that the Fed would not be tightening any time soon. Recall that it was just a week ago that the Fed announced it would raise the discount rate by half, to 0.75 percent. Even though this administered rate has become largely irrelevant to bank borrowing, the markets reacted as though the announcement had been momentous. The dollar soared, gold fell, and the unbiased observer might have concluded that something important had occurred. In fact, nothing of significance had changed. » Read the full article