Monday, April 5, 2010

The chart accompanying the E-Mini S&P tout identifies a target just below round-number resistance 1200.  If it's hit, it would imply a commensurate thrust in the Dow of about 200 points.

There are numerous ABC patterns that point higher, but the one that looks most promising points to 1196.50, a Hidden Pivot that we can use as a minimum rally projection for the near term.  Notice in the chart how the k-A and B-C segments have a kindred resemblance. The target is too close to round-number resistance at 1200.00 to be ideal for shorting, but we should take a stab at it anyway, since it represents the most logical and precise place for a stall just below 1200.

The futures are perched on a midpoint support at 115^09, a hair from breaking down. If the pivot is breached intraday by more than two ticks or exceeded on a closing basis, look for the weakness to persist down to at least 114^06.  You can bottom-fish that number with a three-tick stop-loss, but you'll be on your own if it fills.

The futures have pushed past a midpoint resistance at 17.565 with little effort, implying that a finishing stroke to its 'D' sibling at 18.575 will come just as easily.  Because that would still leave the May contract a tad shy of January's rally tops, we should expect a wallow just below $19 in the days (or perhaps weeks)  ahead.  However, a relatively quick move past $19 would hint of an impending assault on  December's high, 19.495, and an eventual move to 21.535.

Friday's rally was a breakout in conventional terms, as the accompanying chart shows. However, from a Hidden Pivot perspective it generated no heat at all, only a flaccid peak that failed to surpass any prior tops of significance.  On balance, I'll be cautiously bullish at the bell, but I will also stipulate that a print at 1142.40 is needed today to turn the intraday charts decisively bullish.

iPads flew off the shelves over the weekend, at least for a while, but most stores reportedly still had a few of the devices left after the initial buying panic subsided on Sunday. Although there’s been plenty of speculation that the device will be a paradigm-changer for users, the question of which paradigm it will change remained murky at press time. Just about any new device in the computer family is going to shift the game away from Microsoft in some small way, at least, since the Redmond-based software monolith hasn’t brought anything exciting to the marketplace since it introduced the Office suite in 1989.  Apple hasn’t exactly been standing still in the meantime, and the company looks like a good bet to surpass Microsoft in market capitalization sometime this year or early next.  Actually, there’s no reason why this couldn’t happen in mere days if investors were to suddenly grasp how Steve Jobs & Company has already eaten Microsoft’s lunch going out to 2015 and beyond. Remember when Microsoft was planning to dominate our living rooms with a “smart” home entertainment center that would have made going out on Saturday night unnecessary?  There were predictions that all of us would eventually pay the company a royalty for just about anything that made us feel good. Instead, they produced Windows 7 – a pretty decent operating system by most accounts, but not something you’d find at the top of the hedonist’s shopping list. Microsoft’s Last Chance Microsoft has been marking time for so long, accumulating cash it has no idea how to use, that it has forgotten how to innovate.  Our suggestion would be to team up with Sony, another company that has lost its way, to deliver the ultimate killer software that we all know is coming anyway.  We