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From the monthly archives:
May 2010
Although the Dollar Index has spent the last two weeks meandering sideways, it has nothing to prove at this point, since the heavy lifting has already been done. This was true a week ago, when DXY stabbed above a key peak at 86.87 recorded in April 2009. The consolidation from the recent high at 87.46 could come down to as low as 82.86 without disturbing the long-term bullish case at all, but in any event, another powerful leg up would be signaled by a “booster-stage” rally of 1.86 points.
The futures appeared bound for at least 18.890 over the near term, having demolished that Hidden Pivot’s midpoint sibling at 18.450 earlier in the day. A move to the target would be especially good news provided bulls don’t give back too much of it back, since a close merely above 18.795 will shorten the odds of a thrust to a major target at 20.170 noted here earlier.
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The futures spent the whole day obsessing over an important midpoint Hidden Pivot at 1214.90 that was flagged in yesterday’s tout. A two-day close above it is still needed to signal a likely thrust to 1261.80, but a stab above a prior peak at 1222.30 would likely also do the trick. Amidst all the noise on Thursday, the futures could muster only 1220.60. Night owls can try bottom-fishing at 1210.90, stop 1210.40. This is the ‘d’ target of a corrective pattern taken from the 5-minute chart, where a=1217.10. (See also: our recent gold coverage)
Short-squeeze mania was at its most powerful yesterday, pumped to-the-max ahead of the three-day holiday weekend. The hysteria pushed the futures somewhat above a 1098.75 midpoint pivot that we were using as a minimum correction target. The actual high so far has been 1104.00 — an overshoot sufficient to imply that buyers are likely to dominate once again today. Even so, the very difficulty of getting short on a Friday preceding Memorial Day compels us to try. I’d suggest using camouflage patterns on the three-minute chart to do so, although the one-size-fits-all solution would be to buy a put-option “lottery ticket” at the closing bell if the broad averages are at or near their intraday highs. This should not be done in size, since it is a pure speculation, presumably unsupported Hidden Pivot factors.
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Google has labored mightily to hold above the May 6 low at 460, but it looks like the stock will need to come down a bit more, to at least 453.90, to make a durable bottom. We haven’t traded the stock in a while, but we’ll want to buy some shares if and when the stock falls to the target. It’s possible to nail the swings within about 20 cents when we are trading off the 15-minute chart, but in this case I’ve used 180-minute bars to project the swing low. Under the circumstances, I’ve set an alert so that we can try to use camouflage if and when this bottom-fishing opportunity materializes. ______ UPDATE: Cancel the order, since Google is on a flight of fancy that projects to at least 500.75.
A query concerning July Crude during Wednesday morning’s weekly webinar elicited a bearish forecast that calls for a further drop of about $13 on top of the $12 decline that has already occurred since the last rally peak in early May near $90. The actual target, a Hidden Pivot midpoint, lies at 56.68, and if it is reached, the futures will have fallen nearly 37% in just three weeks. The target comes from the weekly chart, where A=117.28 in September 2008.
The futures did everything we asked of them yesterday and more. A little ABC pointed most immediately to at least 18.430, but the key to price action over the near term lies at 18.795, a midpoint resistance whose breach on a closing basis would signal more upside to as high as 20.170 (hourly chart, A=17.080 on May 5). I’ll stipulate a two-day close above that number to be doubly sure it’s dead. Unfortunately, there were no easy handholds for nightowls shortly after midnight EDT.
‘Top Kill’ Effort Must Succeed or Else…
by Rick Ackerman on May 28, 2010 2:03 am GMT · 20 comments
We may all be breathing a sigh of relief by the time you read this, but it remained uncertain at press time whether British Petroleum’s efforts to plug a massive oil leak in the Gulf of Mexico would succeed. Earlier in the day, the company began pumping a heavy fluid called “mud” into the damaged well, but the process was temporarily halted because the high-powered flow of oil and gas from the well was causing too much of the mud to escape. BP said such delays had been expected but that they hoped to resume the sealing operation by late tonight. The effort came amidst reports that oil has been gushing from the well at a rate much greater than what BP had first estimated. The company originally » Read the full article