Thursday, March 18, 2010

An examination of the intraday Euro chart reveals that the alternate "A" point mentioned in yesterday's tout is actually the better of the two, due to a large and exact bounce off of its associated midpoint pivot.  In evening trading a small bearish impulse wave has occurred, and we should watch for this to evolve into a pattern which might allow us to buy the Euro not far above the "C" point of our larger pattern.  That "C" point of 1.3639 must be left untouched for our plan to remain viable.  The "D" target is now 1.3906, far enough away that we can probably leave the question of shorting it for another day.  But if we can get long somewhere above 1.3639, that "D" target is where we'd like the trade to take us.  (Posted by Doug McLagan)

The Yen is in position to impulse one way or the other, and in evening trading it is close to doing so to the upside.  Its destination might be the 1.1229 level discussed in yesterday's tout, which is the midpoint of a pattern from the 360-minute chart.  The best chance to get long for the ride up would be if the market rallied to just above the second (or possibly the third) prior high marked on the chart and then pulled back, creating the appearance of a failed breakout and thus giving us camouflage.  Let's treat 1.1229 as our bullish price target for the time being.  Should the Yen decide to impulse down rather than up, perhaps it would be best to stand aside and watch what happens at the 1.0974 midpoint, also described in yesterday's tout, which comes from a pattern on the daily chart.  (Posted by Doug McLagan)

Today's QQQQ tout goes into considerable detail in explaining, not only how to get short by buying April 48 puts, but how to estimate how much the puts should sell for if the underlying vehicle rallies to the 48.12 target.

If Silver pulls Gold higher today,  look for a pop to as high as 18.040. The sibling midpoint of that target, 17.440, has so far acted as support in trading Wednesday night.  Alternatively, a flurry if selling could be expected to drive the futures down to 17.315, but any lower would hint of more weakness into week's end.

The 1154.30 target given here earlier can serve as a minimum upside target for the near term although the very minor trend is bearish as of 9:20 p.m. EST.  That's nothing a two-day close above 1126.00 wouldn't cure, but until that happens we shouldn't jump to conclusions.  In the meantime, night owls can try bottom-fishing with an 1117.60  bid.  The provenance of that Hidden Pivot is shown in the chart. _______ UPDATE (3:47 p.m. EST):  The futures never quite got down to our bid, rallying instead from an 1118.20 low.  The day-session close above 1126.00 is a positive sign, as noted. 

Just because the futures have pulped an 1157.25 target on the weekly chart does not mean we cannot remain properly skeptical by requiring every uptick on the hourly chart to pass the sniff test. That approach yields an 1177.50 target to shoot for, based on the pattern shown in the inset.  Camouflage entry opportunities will be in limited supply intraday, and so I'll suggest using the 1-minute chart to take the first available ride after the opening bell.  Night owls can try bottom-fishing at 1160.25 with a three-tick stop-loss. That's the midpoint pivot of a down-pattern on the 2-minute chart where A=1165.25 (March 17, 2:26 p.m. EST) _______ UPDATE (2:04 p.m. EST):  The midpoint pivot at 1160.25 gave way easily, telegraphing the intraday low at 1156.25 that was yet to occur.  That is a single tick from the 1156.50 'D'  target associated with 1160.25. (On the 5-minute chart, A=1165.25, B=1157.75, and C=1164.00.)  The theoretical loss on the trade was about $50.

Bloodied bears should ponder the chart below before they surrender to the notion that stocks will continue to rise more or less forever. The first thing to notice is that the crash that followed October 2007’s all-time high came at a time when the Dow average had just pushed into the ozone, moving decisively above 14000 for the first time. It’s not hard to imagine bulls getting pretty fired up back then -- and bears getting ready to dive into their bomb shelters. It looked like a moon shot was under way, and, based on our proprietary Hidden Pivot method, we’d have laid odds that the Industrial Average was bound for at least 14600. Instead, the Dow peaked at 14198, 400 points shy of the target, before commencing an epic collapse to 6479 over the next 17 months.  The similarity between the topping pattern traced out in 2007 and the one taking shape now is hard to miss, as the chart shows. The main difference is that the earlier pattern was more massive. This time we are projecting a rally to at least 10886  on the Dow, exactly 118 points above yesterday’s high. But based on the way the stocks have been acting in recent days, we would expect more than a mere 118-pointer. For in fact, the rally has been shredding its way past Hidden Pivot targets in mere hours when those targets should have contained the move for at least a few days.  Yesterday, for instance, we told subscribers to short a “hidden resistance” at 1161.00, using a stop-loss at 1162.25 that left us exposed in theory to $62.50 of risk. By day’s end, however, the futures had traded as high as 1165.50, implying that buyers were not even breathing hard after sprinting almost without a break since February