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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The pattern shown in the chart is the one that caught my eye during yesterday’s tutorial session. It has since developed and is even more compelling with respect to the opportunity it may present for bottom-fishing. This should be done at 1095.50, two ticks above the Hidden Pivot target shown, with a stop-loss at 1094.20. Pivoteers could also attempt entry via camouflage if and when the downtrend closely approaches the target. Night owls intent on scalping should consider 1111.80 as a place to get short with a tight stop-loss. That is the sibling midpoint of the 1095.50 target, and it should now act as resistance. _______ UPDATE (10:25 a.m. EST): The events of the day have unfolded so far as foreseen. The overnight high was 1111.70, a dime from where shorts were advised, and the futures have since fallen as low as 1100.50. The rally to the C-D midpoint has confirmed the 1095.50 target.
Wednesday’s report on crude oil inventories plucked the oil price like a guitar string. The chart quieted down after tracing an ABC pattern which might allow us to get long a market that has been grinding higher for several weeks. Traders should bid 81.34, just above the midpoint pivot, and, on the theory that the oil market has gotten its ya-ya’s out for now, we will recommend a tighter stop than usual, at 81.23, for a hypothetical risk of $110 on the trade. The sibling D target is not considered a buy, however, as it is just above an important prior low. (Posted by Doug McLagan) _______ UPDATE (10:29 a.m. EST): The futures bottomed a penny beneath our bid, giving us a perfect entry price; then they shot up to 82.08, yielding a theoretical profit of as much as $740 on $110 of risk. They have been spasming wildly ever since, but by now you should be out with a nice profit in any case.
Price action has been so ratty lately that there’s no percentage in guessing where this headless little rodent is going next. However, since the presumption of higher prices has reached the point of near-certitude, we should probably focus for a change on downside opportunities. For starters I’ll suggest jumping on any downtrend initiated on the 3-minute chart with an impulse leg shorter than four points and a single-bar C. The accompanying chart shows what I’m talking about. _______ UPDATE (12:30 p.m. EST): Good thing we went into today’s decline thinking SMALL. The Dow is off a whopping 18 points right now after being down as much as 60 points earlier in the session. Makes one wonder, is that all there is?
Dueling impulse legs on the weekly chart hint of more dithering for perhaps months to come. Even so, a dip to 377.95 would create a tempting buying opportunity, since that midpoint support is relatively isolated from the interference of prior lows. We’ll make it our minimum downside objective for now, subject to negation by a pop above 433.99, the point ‘C’ of the pattern.
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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 Thursday
In the wake of Dubai’s financial plunge, a very bullish picture has emerged from Auerbach Grayson’s recent regional equity conference in Sharm el Sheikh. “There are a lot of things to buy in the Middle East: banks, real estate developers, ceramic makers and white goods producers,” writes one of the attendees, Mike Churchill, of Churchill Research. For his account of the big themes to emerge from the conference, click here. (Our thanks to Jonathan Auerbach for forwarding this report along.)
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.
Placid Stock Charts Hide Menace Beneath
by Rick Ackerman on March 11, 2010 2:06 am GMT · 14 comments
Readers got pretty stirred up the other day after we published a think-piece by Sinophile Mario Cavolo asserting that the world would muddle through its financial crisis without experiencing a catastrophic collapse. Although we disagree and expect a one-two punch of deflation/hyperinflation to put the global economy and financial system into a deep coma for at least a few years, we’d have to concede that a more boring outcome is at least possible. As much might be inferred from the chart below, which shows price action in the » Read the full article