Friday, April 9, 2010

A newly active pattern on crude oil's daily chart adds to the resistance just above its recent high but projects to 91.93 if that resistance can be overcome.  The new midpoint pivot is at 88.15, not far below the "D" target of 88.71 from a larger daily pattern described in the April 5 tout.  Traders attempting to short any of these levels should choose their own entry points and should use stops at least ten cents above each pivot.  A print above 88.80 would clear the resistance zone and give high odds that the 91.93 target will be reached.  (Posted by Doug McLagan)  _______ UPDATE (01:30 p.m. EST):  The futures dropped through the "C" point shown in the chart, cancelling the 88.15 and 91.93 targets.  The 88.71 target remains in effect.

A mostly bearish Euro chart would turn highly bullish with a rally above 1.3593.  On March 25, the Euro bounced from just above the midpoint of a strong weekly pattern which had been touted the night before.  That remains the low of the downtrend which began at the major high above 1.51 last November.  Since then, a daily pattern emerged whose midpoint was breached yesterday.  If its sibling "D" target of 1.3040 is reached, the "D" target of the weekly pattern at 1.2683 will be in play as well.  But if the Euro rallies above 1.3593, the daily pattern will be cancelled and the chart will feature a double-bottom and a midpoint reversal based on the larger weekly pattern.  This would be a bullish picture overall.  Bears can look for pivots to short, but we think this might be a propitious moment to get long the Euro, using Hidden Pivot methodology including camouflage should it be available.  (Posted by Doug McLagan)  _______ UPDATE (April 12, 01:10 a.m. EST):  The Euro has rallied well above 1.3593 on Sunday night's Greece bailout news, cancelling the daily pattern with "A" at 1.3819 and "D" at 1.3040, and turning the general picture bullish.  Traders who got long on Friday are doing well.

Perhaps yesterday's mini-swoon at the opening bell is as bad as it will ever get?  Whatever the case, stay focused on the fact that all price movement these days is impelled by computers that are under the control of cheats, thieves, bunko artists, mountebanks and liars who are all trying to come out ahead at the end of the day.

The bounce came from close enough to a predicted midpoint support to telegraph the rally that followed.  Exuberant and whacky for a few hours, it petered out just shy of some supply peaks recorded earlier in the week. If buyers get second wind today, you can short our old friend at 1196.50 at your discretion, since the pivot is still valid. It is not intended that you hold a position over the weekend, so don't get involved if you are not certain you can exit.

I can promise you at least 1168.40, and soon, but the rally will have to do a little better than that,  knocking off December 7's look-to-the-left-peak at 1171.80, to induce a fresh rush of adrenalin. I should also note that the 1145.60 Hidden Pivot midpoint associated with the major target at 1245.60 would be -- technically speaking -- left in the dust if the futures can muster a close only a few dollars above yesterday's 1152.90. That would suggest the rally is slipping beyond the control of the bad guys.

There was quite a bit of short-squeeze in yesterday's leap, making it hard to predict whether the day's highs will endure.  You could not have bought May 56 puts as advised because  strikes recently listed above $50 are at $2.50 intervals. Still, because a subscriber reported buying May 55 puts for 1.40, we'll use that price to track the position for your further guidance.  Assuming four puts owned (or a multiple thereof), offer two to close today for 1.60.  if the stock is weak on the opening, we are likely to be filled at a better price.  You should also offer two May 50 puts short for 1.20, good-til-canceled. ______ UPDATE (1:40 p.m. EST): We sold the puts on the opening for 1.60, lowering the cost basis of the two puts we still hold to 1.20.  One might think that after 35 years in the game, I'd have enough street savvy to have avoided getting ripped off by the dirtballs who make option markets in this stock (in all stocks, actually). Alas, I have to keep reminding myself that selling market-   or limit-on-opening is nearly always a losing game.  In this case, the stock made highs and lows $1.21 apart on the opening bar, allowing both the NYSE specialist and option market-makers more leeway than usual in fleecing retail customers before the dust had settled. A relative handful of puts trade near 1.60 on the opening rotation, but as soon as the supply of them from the likes of us had become exhausted, the market makers  took them up to 1.95 (there were no trades between 1.65 and 1.85)  and shorted a bunch in anticipation of a snap-back rally in the stock. When this occurred (the specialist is a thief just like the market-makers, and although there is no formal collusion between the two, they know what to expect from each other), they

The upbeat earnings reports issued by retailers yesterday would have seemed inscrutable, had we not been buying merchandise ourselves hand-over-fist during the month of March. Our non-cash household purchases were all made on a single Master Card, and, for sure, the latest monthly bill was a whopper. It included a spring ski vacation, a set of Michelins, a porcelain crown and subscription tickets for next year’s season at the Denver Theatre Center.  But who could have imagined that millions of Americans would join us in shopping up a storm?  Our excuse is that the guru business has been good. Great, actually. But we have many friends who have been struggling through the Great Recession, and even the ones who have managed to keep their heads above water have succeeded in part by cutting back on household spending. So how to explain the impressive results turned in not only by high-end sellers such as Nordstrom’s, but by mid-level department stores like Kohl’s?  Sales there rose 22.5 percent for stores open at least a year, and Nordstrom’s led its group with a 16.8 percent jump. Its competitors did strong business as well: Saks reported same-store gains of 12.7%, and both Neiman Marcus and Bergdorf’s were up 9.2%. Women’s clothing, shoes, handbags and jewelry were the most popular items. A Pleasant Surprise This is hard to square with first-hand impressions gleaned at the local mall. The place usually feels pretty empty except on weekends, and the aisle traffic at Nordstrom’s, the shopping facility’s largest tenant, nearly always seems sparse. Still, it comes as a pleasant surprise that Nordstrom’s numbers have improved. It is one of the very few retailers that still does business the old-fashioned way, putting knowledgeable salespeople on the floor, selling high-quality goods, and standing behind everything they sell 100%. News