April 2010

So why did we remain steadfastly bullish on gold in the wake of this week’s $25 selloff? Because June Gold torpedoed a ‘D’ rally target just before the selloff, is why. In today’s presentation, we took the time to rediscover the subtle analytical strength of the Hidden Pivot Method. Said strength lies, not in the ability to predict swing highs and lows with two-decimal accuracy, which we do often enough, but to correctly forecast the trend even when it seems to defy every shred of logic in one’s brain. To conclude the session, looking at July Corn, we predicted doom for bulls on the basis of a price gap through a minor midpoint support.

Yesterday's feverish chop had a moderately bullish bias and a commensurately modest target:  1160.10.  It is an odds-on bet to be achieved, since, as of Wednesday night, the futures had pushed slightly past the 1158.40 midpoint resistance.   A print at 1160.10 would suffice to refresh the bull on the very lesser charts, but we should require a close above 1161.00 to avoid jumping the gun.  The spaces betwixt each of the three numbered peaks in the chart leaves ample room in theory for the development of a camouflage entry opportunity.

I've taken the Indoos off the "Actionable" list, but please be aware that the blue chip average signaled a minimum 11164 when it took out our 11077 target yesterday. The rally thing is getting pretty silly, really, but the one thing about which we can be absolutely certain is that it cannot continue forever.

We'll lay out another $87 of Monopoly money, betting on a possible top at 1212.50, stop 1214.50.  Camoflageurs should dispense with the stop and simply wait for a southbound abc  once the futures have hit 1211.50 on-the-rise.  My concern is that the target may have been too widely disseminated to afford us the cover of others' cluelessness, but the trade is worth a shot anyway because the rally pattern is such a hottie.

Better take a mental snapshot of yesterday’s glorious economic news, since it’s hard to imagine things will get much better. Retail sales for March were up a reported 1.6%, the service sector supposedly is rebounding nicely, and big-ticket items we starting to sell like it was 2006  all over again.  Economists were ecstatic, of course, since the torrent of good news allowed them to upwardly revise their forecasts for 2010 and beyond. Nor were the sunny tidings confined to Main Street. Over on Wall Street, J.P. Morgan weighed in with a 55% gain in profits for the first quarter, amounting to a tidy $3.3 billion.  Much of it came from their trading desk -- and a good thing, too, since we’d have been gravely concerned if their best and brightest had somehow failed to make money betting the “pass” line on a stock market that has been rising on maybe eight days out of ten in recent months. And rise once again the Dow did yesterday, surpassing yet another Hidden Pivot target with effortless aplomb.  We’d been using 11077 as a minimum projection for the Industrial Average for the last several hundred points; yesterday the blue chip average hit 11125, exceeding our mark by 48 points. A companionable target in the E-Mini S&P gave way almost as easily, implying that buyers are not yet finished. Cool Ben With all the hoopla and hubris, leave it to Helicopter Ben to totally keep his cool.  Here we have an economy that is going absolutely bonkers, and the guy insists there is little to fear at the moment from inflation.  This obviously was music to Wall Street’s ears, since it means that no matter how strong the recovery gets, the Fed sees no great urgency about raising the federal funds rate.  We love

Another good-humored look at the world through stock charts from our friend and paid-up subscriber, Jonathan Auerbach.  Click here  for Auerbach & Grayson's latest technical report, which bears a title that recalls author Tom Clancy at his paranoid best:  The Sum of All Charts.

After Tuesday's sharp but short-lived swoon, crude oil looks bullish again.  A print at 84.57 would confirm a new daily pattern with midpoint and "D" targets of 86.62 and 90.74, respectively.  In between those levels is a "D" target of 88.71, described here on April 5.  The session high so far has fallen short of an important prior high at 84.51, visible on the 30-minute chart.  Traders should watch for a camouflaged buying opportunity, perhaps based on a small pattern which impulses to just above the 84.51 prior high.  Stop orders should be ten to twelve cents above any of the three pivots if shorting is attempted.  (Posted by Doug McLagan)  _______ UPDATE (April 15, 05:40 a.m. EST):  Traders should watch the pullback from 86.39 for a Hidden Pivot-based opportunity to get long with limited risk.  The powerful impulse wave from 84.24 to 86.39 on Wednesday morning surpassed a prominent prior high by two ticks, and we might expect a follow-through CD leg to begin soon.  The 30-minute chart gives us a good view of the action, and a 54-cent rally will confirm a pattern so long as the pullback is not too deep.  After the Wednesday rally, the 86.62 midpoint pivot looks dangerous as a place to go short. _______ FURTHER UPDATE (April 16, 03:15 a.m. EST):  Oil has declined enough to call the Wednesday impulse wave into question, so we will take this tout off the actionables list and await developments. The daily chart remains bullish, with the two patterns we have been watching still very much intact.

I broached a 607.98 target today in the chat room, but let me repeat it here to make it official. It has already been corroborated by a stall in late March near the 573.84 midpoint, which can be used for bottom-fishing in the event of a pullback before GOOG makes its final ascent. Camouflage for bulls will be hard to come by after yesterday's moon shot, but if you're looking for it, I'd suggest watching for ABCs on the 3-minute chart or less.

A midpoint support beckons at 1147.90 and can be bottom-fished with a four-tick stop-loss, provided the point 'C' of the pattern, 1154.30, has not been breached to the upside.  If the futures rise instead, they'd change the tenor of the lesser charts to bullish with a print exceeding 1158.80.  For a bigger picture please refer to today's commentary, which reiterates my requirements for a strong push up to $1245.