Tuesday, May 18, 2010

Yesterday's low came with 0.64 points of an important midpoint pivot I'd flagged, so we should pay close attention over the next day or two to determine whether it may have marked a crucial turn.  This would be confirmed by a print exceeding a look-to-the-left peak at 507.38 recorded on December 3, although a less ambitious benchmark at 493.87 can serve for now.

We've been using a downside target of 135.35, but I am now recommending bottom-fishing if and when Goldman falls to another Hidden Pivot at 137.69.  I'll update with more detailed instructions following a print within $1 of that target, so check back if you're interested.  The target would be hit, ideally, following a slow grind lower, but if it comes in conjunction with a stock market avalanche, you should back away. _______ UPDATE (2:40 p.m. EDT):  The stock has traded down to 137.55 so far.  For your guidance I will establish a tracking position of 400 shares.  A 137.44 stop-loss is advised for now, and you should take profits on half if GS trades up to 138.69. _______ FURTHER UPDATE: The stock finally bottomed at 136.60, stopping us out for a $100 trading loss -- but also warning that, despite the  nearly $2 bounce from the lows, sellers are not yet done with Goldman for the moment.

The futures went no lower 10411 before reversing into a short-squeeze rally, but the 10258 target remains valid nonetheless and can be used for bottom-fishing with a tightly stopped bid. Alternatively, bears can probably throw in the towel for the day if buyers push this brick above 10664, since that would create a promising impulse leg on the 15-minute chart.

The 25-point short-squeeze that ended an otherwise tedious day still fell five points shy of meaningfulness on the lowly five-minute chart, since that's what it would have taken to create a bullish impulse leg worth mentioning.  Now let's hope the bulls are not getting their hopes too high -- or rather that they are, since that's about the only thing that can ultimately bring prices back in line with reality. Regardless of what happens, yesterday's price action left me with no good handholds for a confident forecast for today, so I won't even try.  The 1098.75 midpoint support is perhaps the best number we've got at the moment.

A retracement target at 18.685 given here earlier can still be used as a minimum downside objective for the near term, although a print exceeding 19.015 would invalidate it.  Please note that a decisive breach of the support would put the futures in jeopardy of falling to as low as 18.355.   Alternatively, we should ask no less than a rally to 19.475 today before we infer that bulls have regained control of the lesser charts.  That benchmark accords with a benchmark given today for June Gold and corresponds to a May 14 look-to-the-left peak on July Silver's 5-minute chart. ______ UPDATE (12:49 p.m. EDT):  The downside target was breached by 3.5 cents, but the selling has given way to a bullish impulse leg that seems more threatening to bears than to bulls.  Accordingly, we'll use 18.575 as a downside target if the bad guys get second wind.  That would leave 9 cents of room beneath the so-far low for bulls to turn things around.  They could also achieve this -- decisively -- with a print today or tomorrow exceeding 19.445.

Gold's inability to get traction may simply have to run its course -- meaning the June futures could slip down to as low as 1211.90, a Hidden Pivot, as they stage for the next thrust.  Alternatively, a print above 1238.20 would turn the lesser charts bullish once again -- and presumably buoyant.  The accompanying chart shows the relevant look-to-the-left peak that would make this so. ______ UPDATE 12:39 p.m. EDT): Sellers overshot the target by $5, implying they are not yet done.  If this proves to be the case, the futures should soon be headed down to at least 1204.50, a midpoint pivot, or to as low as 1189.00 if it is breached on a closing basis.  Alternatively, it would take a print at 1230.20 today or tonight to turn the lesser charts bullish.

From a Hidden Pivot perspective, the markets seemed unable to do anything right yesterday:  the E-Minis did not fall quite far enough;  their short-squeeze recovery from half-baked lows was too strong, especially considering the whole world is quite visibly going to hell in a bloody handbasket; Gold did not reverse with a vengeance after being stupidly sold down by the usual clueless imbeciles; and, finally, the euro finished the day on an upswing, notwithstanding the fact that even the village idiot knows the currency's on its way down into the low 80s.  We'll just have to hope for better today, I guess.

[Lately, Mother Earth has been angrier than we can ever recall. A friend of ours with a keen interest in the predictions of seers alerted us a few years ago to the prospect of a dramatic increase in seismic activity around now, so we were naturally eager to have him update the forecast. He has obliged with the grim predictions detailed below. Be warned that his outlook is not for the squeamish and that it suggests 2012 could be a year in which natural disasters impact hundreds of millions of lives around the planet. Incidentally, if you’d like to sample the eclectic range of Rick’s Picks commentary, we offer a free seven-day trial, including daily stock and futures recommendations.] Rick has asked me to outline the impact of potential future geological events on the U.S. economy. I am not a geologist or an economist, (although I do have an eclectic university education background) - my own personal studies for the last several decades have included amongst other things various prophecies about future events from multiple sources around the world. I write this anonymously, and am writing it at Rick's request. I am just putting it out there for your consideration - what you choose to do with this prophetic scenario, if anything, is up to you. Even the least observant amongst us is slowly becoming aware of a building 'drumbeat' of seismic events on our planet - that seem to be increasing in both frequency and magnitude and occurring in areas where we find significant populations. Recent large scale destructive events include the Indonesian tsunami; central China, Haiti, Chile and last week's western China earthquakes and also the recent eruption of an Icelandic volcano. Combined, these major seismic events have cost hundreds of thousands of lives and billions in damages.