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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
Now that we have Sunday Night Opportunism figured out, meaning we “know” that it always pays to fade the trend just ahead of a new week, we can hoot and guffaw as shares move higher tonight. With the futures currently up 3.50 points, the implication is that DaBoyz are reading weakness, backing away from their offers so that widows and pensioners can foolishly chase the index futures higher. So what to do? Although I rarely suggest playing fast and loose, because we are short one contract, effectively from 1220.00, we can afford to gamble a little. Continue to use a fixed stop at 1171.25, but make it o-c-o with an order to cover the short at 1144.00. The worst we can do, in theory, is come away with a $2400 profit. If you are on board, continue to check for updates, since I may decide to let our profits run if the futures come down hard. _______ UPDATE (1169.25): The futures rallied overnight to within a single tick of our stop-loss, but the selloff since has been too shallow to suggest DaBoyz are about to loosen their iron grip on shorts’ cahones. In any case, we’ll simply stick with our plan, using the stops given above.
We hold two April 48 puts for a profit-adjusted 0.56. The Tradestation platform is ignoring my request for put-option prices at the moment, so I’m flying in the dark as far as the recommendation to close out one of the two puts for 1.32 is concerned. Leave the order in for now, but check back an hour into Monday’s session to see if there are any adjustments. My current downside target is 47.63, somewhat higher than the 47.09 target we had been using.
The daily chart yields a mildly bearish picture for the near-term — in this context, meaning the next 4-7 days. The outlook would change to very bullish if the futures can hit 1148.25 this week, a feat that would surpass no fewer than three external peaks. There are no compelling camouflage opportunities in this environment, although a rolldown from around 1120.00 would set up a possible bottom-fishing opportunity near 1089 later in the week.
The futures surpassed our 82.17 target by just 0.07 points, then slid steeply into week’s end. That doesn’t tell us much by itself, but we’ll have a better idea of how much weakness may exist below the surface if and when DXY interacts with a Hidden Pivot correction target at 81.37. Sunday night’s low was holding 0.06 points above it, but it would take a reversal and a print today exceeding 82.03 to put bears on the run.
Copper appears ready to impulse to twenty-month highs. After jumping on March 1 in response to earthquake news from Chile, the futures have consolidated within the range that was defined that day and the next. But in the last 48 hours of trading, copper has traversed most of the March range and is poised to break out to the upside. Traders should look for a way to get long based on a small intraday pattern, ideally one offering camouflage. (Posted by Doug McLagan)
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Homeowner ‘Rescue’ More Like an A-Bomb
by Rick Ackerman on March 29, 2010 5:08 am GMT · 15 comments
Although Bank of America has won praise from the news media for offering to reduce the mortgages of tens of thousands of underwater homeowners, Rick’s Picks readers were less kind in their assessment of the new relief program. One reader who posted in the forum saw it as an act of desperation – B of A’s only hope of keeping foreclosed assets from being liquidated at street value. “[The bank is] leveraged so highly that they have no choice but to write down twenty percent rather than take one in the teeth,” wrote Mark L. We ourselves had called mortgage modification the most consumer-oriented idea to come out of » Read the full article