Tuesday, June 1, 2010

European Central Bank’s Report Issues Warning - NYTimes.com.

Stocks Down in Europe Over Job Concerns - NYTimes.com.

This weekend,  I appeared on Al Korelin's The Korelin Report, where we discussed the responsibility of government in the BP disaster.

Here is a link to video from my appearance on Max Keiser's On The Edge, where we talked about market making, high frequency trading, flash crashes, deflation and hyperinflation.

There was enough unsettling news over the weekend to wipe the silly smirk off Wall Street's face, but so far DaBoyz have resisted serious carnage in the index futures Monday night. My hunch is that support near the so-far lows is very flimsy and that They won't be able to squeeze shorts too hard for a last-gasp distribution this evening.

We hold 800 shares with an adjusted cost basis of 12.95.  Our most recent covered write expired in May, but we'll look to sell some more call premium against our stock if and when it pokes above $20. ____ UPDATE:  The stock is trading above $20, but this seems like a good time to be a little greedy, so we'll hold off on the covered write.  My next rally target is 23.72, and that is where we'll plan to lay out some call options.

A fairly important Hidden Pivot resistance at 20.170 remains our minimum upside target for the moment, but an 18.795 midpoint resistance will need to be overcome first. Sunday night price action was too choppy for an easy entry, but an impulsive thrust peaking between the two labeled highs could set up an excellent camouflage buying opportunity.

The futures look finally to be leaving the 1214.90 midpoint resistance behind, presaging a run-up to as high as 1261.80 over the next 3-5 days.  More immediately, they are tracking a minor bullish pattern that points with some clarity to 1236.20.  If it's breached by more than $1 or so, we should infer that a test of mid-May's 1251.40 high is imminent. Night owls can try buying on a pullback to 1220.00, the midpoint associated with the 1236.20 target, but I'd suggest using camouflage if available to limit the entry risk to four ticks or less. ______ UPDATE:  The futures dipped as low as 1218.20 overnight, so any attempt to buy down near 1220.00 with an ultratight stop-loss would have been stopped out for a small loss. 

As of around 9:45 p.m. EDT, the futures were predicting the Dow would hold above 10000 in the face of moderate selling. The minimum downside target is 10024, but if that Hidden Pivot support should be violated by more than 5-7 points, it could open the floodgates over the near term down to as low as 9599.  The accompanying chart shows the provenance of the 10024 target -- a bearish pattern identical to the one being traced out at this moment by the E-Mini S&Ps.