Our small put position is showing a theoretical gain of about $890 following yesterday’s refreshing plunge in the broad averages. We hold two August 98 puts for 1.06 and four July 96 puts for 0.70; they closed, respectively, at 1.54 and 3.85. We should be encouraged by the latter number, since the puts magically traded down to 3.85 after having been as high as 4.15 minutes earlier. What that means is that the thieving dirtbags who are short them — professional market makers, like I used to be – are struggling to hold them down. They may have been “marked” at 3.85 for settlement purposes, but you can bet there weren’t many for sale at that price and that the market makers would have jumped on any serious offers at 3.90 or even 3.95. They project to at least 5.00 right now (see chart), implying that sellers are not yet finished with the Diamonds/DJIA.
All signs pointed lower at the close, although there were no compelling targets amongst a handful of relatively minor ones. A trendline connecting two lows since June 10 implies support around 18.265, and that is the number I’d suggest using if the futures remain weak. To put bulls on the advantage, buyers would need to push the July contract above 18.800 today.
The downtrend projects to 9431, implying another 440 points of creative destruction over the near term. The feverish short-squeeze at the tail end of yesterday’s session racked up 80 points, hinting that DaBoyz might be more eager to sell ‘em near the top of a phony rally than to buy ‘em at whatever ostensible bargain-basement lows might obtain intraday. Still, with the July 4 holiday coming up and no clear call on whether America is taking Monday or Friday off (or perhaps both) bullish seasonality will be ratcheted up to the max. We should therefore be on our guard against the gratuitous leap higher, since it is hardly a longshot bet. It would be telegraphed in subtle fashion with a print exceeding 9967.57 on the 5-minute chart.
The futures are recovering gingerly after a two-day strafing that appears to have ended yesterday morning. Most immediately, a minor ABC rally pattern pointed to a Hidden Pivot resistance at 1249.00, assuming its ‘p’ sibling at 1244.20 can be easily surmounted. It will take a bit more, however, to put bulls on the offensive. Specifically, the futures must rally today above a 1252.60 “look-to-the-left” peak visible on the 5-minute chart. The resistance was created during Monday’s sharp break, and it will need to be overcome if the futures are to refresh the bull trend on the intraday charts.
I put out some quite-bullish rally targets back in May, and now the futures are close to achieving them. The forecast referenced the June contract and called for a move up to 128^17, or perhaps to as high as 130^04 if the lower resistance, a Hidden Pivot, was breached. The equivalent numbers for the September contract are, respectively, 128^07 and 129^28. Either could mark an important top, and that’s why I am revisiting the forecast.
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We were briefly long yesterday morning, unaware that we were buying into an avalanche. We wound up scratching the trade, but the position was actually profitable for about ten minutes when the futures rallied from within a single tick of the tradable low that had been predicted, a Hidden Pivot support at 1046.75. The ride was short-lived, however, and ended abruptly when some allegedly shocking consumer confidence numbers hit the tape. The futures dove in an instant but we came out fine, since we had already taken a partial profit on the position and implemented a cautious trailing stop (all by way of detailed, minute-by-minute instructions proffered in the chat room). We wondered aloud just who it is who is doing the expecting whenever these numbers are released. It would have to be economists, since no one else we can think of would have been wider of the mark. And now, whither the futures? 992.50 is the target I posted in the chat room, and it still looks great. Keep in mind, though, that with July 4th seasonality at gale force right now, an unmitigated collapse would be highly unusual. On the other hand, if DaSleazeballs had had the ammo to short-squeeze stocks at any point yesterday, they’d have done it. In fact, the broad averages barely got a bounce the entire day.
Our small put position is showing a theoretical gain of about $890 following yesterday’s refreshing plunge in the broad averages. We hold two August 98 puts for 1.06 and four July 96 puts for 0.70; they closed, respectively, at 1.54 and 3.85. We should be encouraged by the latter number, since the puts magically traded down to 3.85 after having been as high as 4.15 minutes earlier. What that means is that the thieving dirtbags who are short them — professional market makers, like I used to be – are struggling to hold them down. They may have been “marked” at 3.85 for settlement purposes, but you can bet there weren’t many for sale at that price and that the market makers would have jumped on any serious offers at 3.90 or even 3.95. They project to at least 5.00 right now (see chart), implying that sellers are not yet finished with the Diamonds/DJIA.
All signs pointed lower at the close, although there were no compelling targets amongst a handful of relatively minor ones. A trendline connecting two lows since June 10 implies support around 18.265, and that is the number I’d suggest using if the futures remain weak. To put bulls on the advantage, buyers would need to push the July contract above 18.800 today.
The downtrend projects to 9431, implying another 440 points of creative destruction over the near term. The feverish short-squeeze at the tail end of yesterday’s session racked up 80 points, hinting that DaBoyz might be more eager to sell ‘em near the top of a phony rally than to buy ‘em at whatever ostensible bargain-basement lows might obtain intraday. Still, with the July 4 holiday coming up and no clear call on whether America is taking Monday or Friday off (or perhaps both) bullish seasonality will be ratcheted up to the max. We should therefore be on our guard against the gratuitous leap higher, since it is hardly a longshot bet. It would be telegraphed in subtle fashion with a print exceeding 9967.57 on the 5-minute chart.
The futures are recovering gingerly after a two-day strafing that appears to have ended yesterday morning. Most immediately, a minor ABC rally pattern pointed to a Hidden Pivot resistance at 1249.00, assuming its ‘p’ sibling at 1244.20 can be easily surmounted. It will take a bit more, however, to put bulls on the offensive. Specifically, the futures must rally today above a 1252.60 “look-to-the-left” peak visible on the 5-minute chart. The resistance was created during Monday’s sharp break, and it will need to be overcome if the futures are to refresh the bull trend on the intraday charts.
I put out some quite-bullish rally targets back in May, and now the futures are close to achieving them. The forecast referenced the June contract and called for a move up to 128^17, or perhaps to as high as 130^04 if the lower resistance, a Hidden Pivot, was breached. The equivalent numbers for the September contract are, respectively, 128^07 and 129^28. Either could mark an important top, and that’s why I am revisiting the forecast.
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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.
ESU10 – September E-Mini S&P (Last:1035.50)
by Rick Ackerman on June 30, 2010 12:01 am GMT