Tuesday, March 16, 2010

Index futures were slithering higher a little after 10 p.m. EST, putting pressure on shorts ahead of Tuesday's opening.  Perhaps Wall Street sniffs victory for Obama's health care plan?  You read it here first, but it's probably only a matter of time before some imbecile writes about it seriously elsewhere.

A 377.79 downside target given here earlier is still viable, but we can lower the bullish reversal threshold to 426.93 from 433.99, since that's where the hourly chart would turn positive again. If instead HUI heads lower, bottom-fishing at 399.46 would be a decent speculation. We'll make that our minimum downside target for now.

Stairstepping their way lower for nearly two weeks, the futures have noticeably failed to generate even an ounce of fear. A print today at 1128.30 would show bears who's boss, but failing that, look for more timid selling down to as low as 1088.00, where structural support from some prior lows exists.  A 1095.50 downside target remains viable, and you can try bottom-fishing there with a stop-loss as tight as 1094.90. 

What a stretch.  After struggling to go lower, stocks got short-squeezed back to unchanged in the final hour of the session. (Incidentally, the day's low was a nearly exact hit on the 'D' target of a pattern on the hourly chart.) To paraphrase Yogi Berra, it was deja view all over again -- for about the hundredth time.  Fortunately, we had profitably covered all but a single contract of the short position we'd established on Friday. Profit taking has raised our cost basis to 1177.00 (basis the June contract), implying that even if Mr Market does his very worst, we will come away with a handsome gain. Having rolled into the June contract yesterday, let's set a stop-loss at 1151.00.  This is slightly below Friday's peak, but just above a look-to-the-left high whose breach would be telegraphing a breakout. ______ UPDATE (1:01p.m. EST):  We covered at 1151.50, realizing a theoretical gain of $1275 per contract.  We'll continue to short this silly bear rally whenever a similarly juicy opportunity arises.

David Beckham reportedly was recuperating Monday after surgery in Finland to repair a torn Achilles tendon. We wish him well, since no other player has done so much to stimulate interest in the game in the USA. The Los Angeles Galaxy’s celebrated midfielder was on loan to an Italian team, AC Milan, playing in a game against Chievo Verona, when he stepped back awkwardly while taking a pass with his left foot. “He started hopping on his right foot with an expression of pain on his face,” according to a news report.   “He reached a hand down to his left heel, then stood up and gestured as if he was breaking a twig in half to show the AC Milan bench he knew the tendon was broken.” Considering how much strain the Achilles tendon absorbs, it can be amazingly fragile. My wife ruptured her Achilles tendon the same way Beckham did. She took an awkward step backward while playing ping-pong at a birthday party, and felt something go pop. I’d met her that same night and couldn’t understand why, after giving me her phone number, she didn’t return any of my messages for more than a week. I didn’t know it then, but she was in the hospital recuperating from surgery. She described the injury as the most painful thing she’d ever experienced.  The tendon eventually mended completely, but it took a long time for her to get comfortable doing things that put strain on it, particularly skiing. The 34-year-old Beckham, is undoubtedly in the care of one of the best surgeons in the world, and so a Galaxy spokesman’s claim that he will return to top form seems credible.  But it will still take time – at least three months -- before he can put even mild strain on