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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
The futures have been down as much as 14 points Sunday night. This would be just a routine shakedown if not for the fact that the so-far low exceeded the key bottom at 1055.50 recorded ten days ago. A subsequent rally has generated a little short covering, but the action looks so feeble that one might infer bears are not very nervous about starting the week with big stacks of chips on the “Don’t Pass” line. I’ve drum-rolled a target at 1022 in today’s commentary, and you can nibble there with a tight top-loss, but keep in mind that a breach of that Hidden Pivot by more than 1.50 points would imply more downside to at least 1014, or possibly even to as low as 997 (a back-up-the-truck number for bottom-fishing). FYI, bulls would need to hoist this cinder block above 1088 today to mount a credible threat.
Gold was acting too timid Sunday night to suggest it’s ready to tack a follow-through onto Friday’s powerful reversal. However, the neutral short-term outlook would brighten considerably on a print today at 1231.20, since that’s where the hourly chart turns bullish. Maximum upside target for the near-term if buyers romp: 1261.80. At the moment, however, they look like they’d rather just mark time for at least the next few days.
July Silver looks like it could grope its way down to as low as 17.000 (a Hidden Pivot) in search of traction, but bulls would gain the upper hand, at least for the near term, if they can surpass the 17.645 peak recorded in the throes of Friday’s selloff.
The futures are at a crucial resistance — the 124^31 Hidden Pivot midpoint of the big pattern shown in the chart. It projects to as high as 130^04 (!), but there is also a lesser bullish pattern that suggests 128^17 is possible without a lot of strain. It’s midpoint sibling lies at 125^07, so let’s stipulate that if the the futures exceed 125^07 on a closing basis for two consecutive days, they should be considered on their way to significantly higher prices. That would be bad news for equities in the U.S. and elsewhere, since it implies a full-blown panic into the supposed safety of U.S. Treasury paper.
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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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Hints of a Washout Bottom in U.S. Stocks and Euro
by Rick Ackerman on June 7, 2010 12:01 am GMT · 8 comments
The mirage of economic recovery conjured up by our political leaders and a credulous news media dimmed and flickered in the harsh light of reality on Friday, when grim employment figures for May sent stocks into one of their steepest dives of the year. Although 431,000 jobs were added last month, most of the workers were census-takers hired temporarily by the government. Even that figure evidently was ginned-up, since it appears that many of the workers had been laid off during intervals when there was little to do, only to be rehired later and recounted. But the bottom line for private-sector » Read the full article