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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
The 1108.25 target touted here yesterday remains valid, and I’d suggest shorting it in any way that suits your style. The hesitation yesterday at the midpoint resistance implies that it will work, but the usual caveats apply. Virtually all serious rallies begin with laughable ones like the one that has unfolded over the past week. However, this one would become pseudo-legitimate if it hits 1143.00, since that would create a bullish impulse leg of daily-chart degree. Keep in mind that in order to qualify as such, the rally would need to be unbroken between peaks #1 and #2 (as shown in the accompanying chart).
It wouldn’t take much for Apple to breach four “external” lows on the daily chart, but I doubt it will require so extreme a shakedown to allow DaDirtballs to exploit the ”disaster” they have concocted over the new iPhone’s poorly designed antenna. Apple will get past the problem, its customers will get over it, the Dirtballs will get to steal stock from widows and pensioners for fire-sale prices, and the Cupertino-based company will remain one of the very few that produces consumer goods that people line up at midnight to buy — not to mention, pay ridiculous prices for.
Silver is stuck in the same rut as Gold, notwithstanding yesterday’s superficially impressive 49-cent thrust. The trendline that we’ve been using to project the next test of support comes in at 17.365 today, a tick higher than yesterday.
If you can contrive to ignore the nasty irregularities of the B-C leg, an 82.80 downside target looks like a piece of cake. That Hidden Pivot can serve as our minimum downside objective for now, but please note that if it’s hit, that would refresh the bullish impulse by exceeding the key May 10 low at 82.91.
I called the rally unimpressive in the chat room for three reasons: 1) It derived from an ersatz (aka “sausage”) A-B impulse leg; 2) it failed to achieve a 1222.90 Hidden Pivot target; and 3) it failed to exceed a minor look-to-the-left peak, also at 1222.90 (and visible only on the 15-minute chart or less). The 1222.90 benchmark was never intended to be a major bull signal — only a threshold that would mildly challenge buyers. We’ll continue to use it as an indicator of bullish resolve nonetheless, but it should not be regarded as an all-clear signal by those who have been waiting for one.
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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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Appalling News Spurs Yet More Idiotic Buying
by Rick Ackerman on July 14, 2010 12:01 am GMT · 26 comments
U.S. stocks took yet another idiotic leap yesterday, presumably buoyed by news of a ghastly increase in the U.S. trade deficit. Of course, on Wall Street these days all news is fabulous news, and so no one should have been surprised when the broad averages leaped to embrace and celebrate this latest, absolutely appalling evidence of a failing U.S. economy. The Commerce Department reported that imports exceeded exports by $42.3 billion in May. A dip below April’s already frightening enough $40.3 billion deficit had been expected, but it was simply not to be. One analyst attributed the latest increase in imports over exports to the stockpiling of Chinese goods by U.S. retailers and producers fearful of a trade war. If so, Wall Street’s best and brightest are bound to see this prospect as a win/win development, since the very process of losing such a war would necessarily ratchet up the flow of cheap Chinese goods into the U.S., stimulating more borrowing by American » Read the full article