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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
We would have been ultra-cautious about trading a midpoint only slightly above the “B” point of a hidden pivot pattern, especially in the volatile crude oil market. But after surpassing that midpoint by only five cents, the market dropped $1.50. Oil bears who see this as the end of the recent rally should look for small patterns to provide shorting opportunities. If the market breaks the $81.00 level, however, we should look forward to a battle royale at the 15-month high. The D target of this pattern, at 84.74, is 22 cents below that high, so we might expect some intrepid pivoteers to be among the front-runners. _______ UPDATE (1:58 p.m. EST): In volatile trading after an inventory report, oil rallied above $81.00 and then settled back somewhat. Oil traders should now be watching for small bullish patterns.
There is a pivot on the 30-minute Euro chart at 1.3680, just above the session high so far, but it lies only four pips below an important prior high, and twelve pips below another one, at 1.3692. A print above there would give a bullish signal. A move to 1.3840 or higher would break two versions of a bearish daily pattern with targets at 1.3398 and 1.3344 and would indicate a reversal of the Euro’s three-month decline. _______ UPDATE (1:40 p.m. EST): The Euro came within five pips of 1.3680 before falling more than fifty pips, but then it turned back up and easily surpassed the pivot and the two prior highs just above it.
The daily chart is still bullish, since the last impulse leg to form, on February 18, has yet to be negated by a trend leg going in the opposite direction. However, the fact that the dollar has been in a holding pattern for a month allows the suspicion that it is in a broad topping pattern. That’s nothing that a relatively modest thrust to 81.48 wouldn’t cure instantaneously, but until it happens, bets on a continuation of the rally begin in early December are speculative.
Yesterday’s punk performance will have no bearing on the 1137.25 rally target proffered here earlier. It looks like a lock-up, but it will also make for an enticing short, stop 1139.50, if and when the futures get there. Buyers should look for camouflaged bottom-fishing opportunities if there’s a pullback to 1110.75. That’s the Hidden Pivot midpoint associated with the target.
We hold a round lot of stock whose cost basis has been reduced to 11.01 by the sale of options over time. With AKAM approaching a Hidden Pivot resistance at 28.49, let’s plan on shorting a March 28 call if and when the stock gets within 0.05 points of the target. Mark the order good through Thursday. ______ UPDATE: The stock popped to 28.75, allowing us to short the call against our stock for 0.94 before AKAM receded 72 cents. Do nothing further for now. _______ EXPIRATION UPDATE: We let our stocks get called away at expiration for an effective 28.94, yielding a theoretical gain of of nearly $1700 per round lot. We can start anew if another great opportunity presents itself.
The futures somewhat exceeded a Hidden Pivot resistance at 16.985 yesterday, creating a robustly bullish impulse leg on the intraday charts in the process. This portends more upside over the near term to at least 17.115, but a close above that Hidden Pivot would augur 17.470. The midpoint associated with that last number is 16.900, making it a logical place to try bottom-fishing on a pullback. _______ UPDATE: The rally made it to 17.370 before sellers shaved 30 cents off the high. We missed catching the ride north because the overnight low never got any lower than 16.950. The 17.470 target remains valid.
Gold peaked overnight a dime from the 1144.50 target flagged here earlier. This is bullish action, of course, but as I noted in the original tout, the April contract will need to close above that Hidden Pivot resistance before it embarks on a new leg up. Once under way, the rally from that launching pad should be assumed bound for 1244.50 exactly.
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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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Our Man in China Sees No Global Crash
by Rick Ackerman on March 3, 2010 12:01 am GMT · 42 comments
(Editor’s note: The following essay provoked a firestorm in the forum, so we are running it for a second day. The author is Mario Cavolo, a speaker, writer and media personality who has lived in China for more than a decade. His point of view is far more bullish than our own, and most of those who responded to it evidently do not share Mario’s optimism that the world’s financial crisis will simply go away. RA)
Let’s start with a core economic premise and build a scenario of supporting premises as we ponder the new reality of our global economic future without the rhetorical, crash and doomsday scenarios which almost never play out. Here is the premise to explore: Nothing will crash or collapse. Not the Euro, not the USD, not the stock market of this or that country; not anybody’s entire financial system. Assets will swing wildly up and down, systems will change, sometimes dramatically but doomsday collapse is off the table. People who constantly focus on threats of doomsday this and parabolic that are too addicted to the emotional thrills attached to such moves, or trying to sell you something; » Read the full article