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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
In the absence of even a speck of buying interest, the 1175.75 rally target is still the most compelling choice we’ve got. Short there with an 1177.25 stop-loss — a pittance if you were on board for the nearly $2800 ride we got from Monday’s 1146.75 low. Alternatively, the futures would need to fall to 1157.25 today to turn the (very) lesser charts bearish.
The pattern from which the 1073.20 target disseminated yesterday was derived looks too pretty not to play out as drawn (see inset). You can bottom-fish aggressively, and this time I’ll leave the stop-loss up to you. It can be as tight as 4-6 ticks. If the target gets bombed, we’ll need to consider the 1044.50 structural low — early February’s bottom — as a minimum downside objective.
A fall to at least 16.365, the target flagged in an update to yesterday’s tout, looks imminent and unavoidable. You can bottom-fish there, but the stop-loss would need to be below 16.360 to encompass an alternative ‘D’ target a tick below the one at 16.365. If you are keen on shorting the predicted decline, look for camouflage on the 5-minute (or less) chart. The futures were slightly buoyant Wednesday night, so you must trust the first bearish impulse leg that comes your way to get on board with stealth.
Yesterday’s spirited leap brought the Dollar Index within 0.14 points of the 82.17 rally target I flagged here yesterday. It remains shortable, but you’ll have to choose the vehicle and interpolate the target. Since there is always the possibility the target will be exceeded, I’ll note that a close above the target would be warning bears to dive for cover.
Converging hidden pivots should provide support to the Euro just above the 1.3250 level. The midpoint of the pattern on the weekly chart is at 1.3251, and the “D” target of an intraday pattern is at 1.3253. A print of 1.3239 would leave no doubt that both targets had been breached, and this level can be used for stop orders by traders willing to risk about as much as we ever recommend doing. Traders preferring to risk less should bid just above the 1.3253 pivot with a stop a few pips below 1.3250. (Posted by Doug McLagan) ________ UPDATE (4:00 a.m. EST, 29 March): Discussions in the chat room of how to judge whether a target has been hit or missed prompt us to cancel this trade recommendation now, because the approach to the midpoint of 1.3251 on the weekly chart, although not quite an unambiguous “hit,” was impressive enough to invoke the “no sloppy seconds” rule.
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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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Consider the Odds Before Buying Puts
by Rick Ackerman on March 25, 2010 2:27 am GMT · 3 comments
We exited a bullish position in the E-Mini S&P yesterday on a trailing stop, expecting to reverse our strategy and get short at a slightly higher price. The futures need only have tacked five points onto Tuesday’s highs to trigger the new trade; alas they spent all of Wednesday going nowhere as we sat on our thumbs, bored half to death. The charts suggest the market is tied up in knots — and what’s a trader to do? We are given to infer once again that there is virtually no buying interest right now other than from bears covering shorts; moreover, when demand from that source is absent, stocks cannot make even an inch of headway to the upside. Just as obviously, there is no selling power whatsoever, and any » Read the full article