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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
We should tone down the hooting and guffawing for the moment, since the futures did manage to poke their ornery little snout above Friday’s and Monday’s highs before heading south yesterday. This left a bullish impulse leg on the hourly chart, and even though the pullback was continuing into the night, DaBoyz will have strong seasonality (i.e., Memorial Day weekend) in their favor if they should wish to turn things around on Thursday. The good news for bears is that buyers were unable to capitalize on a truncated but still powerful impulse leg that occurred with two hours left to go in yesterday’s session.
The 1261.80 target that I alluded to in today’s commentary is the Hidden Pivot sibling of a midpoint resistance at 1214.90 that was also mentioned. The provenance of both of these numbers is shown in the accompanying chart, and although the rally pattern is a little too obvious to be considered ideal, it looks good enough for predictive purposes. Night owls will not easily find camouflage, since the uptrend is entering its fifth straight day, but you might try boarding on whatever pullback — the briefer the better — occurs following a feint above the 1222.30 peak labeled in the chart.
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.
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.
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.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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Wall Street Keeps the Laughs Coming
by Rick Ackerman on May 27, 2010 5:17 am GMT · 8 comments
The action on Wall Street is starting to remind us of Harlem Globetrotters shtick. Yesterday’s comic show conjured up Meadowlark Lemon at the free-throw line: He pumps once, he pumps twice, then he sends the ball arcing toward the basket. Half-a-dozen guys leap for the rim, only to see the ball, which has been tethered to Meadowlark’s finger by an elastic cord, snap back into his hand. Something like that occurred yesterday on the NYSE, where stocks opened on a vaulting arc, only to be hauled back down to earth in mid-flight. Although the Dow had been up about 135 points in the early going, by day’s end it was » Read the full article