Monday, July 19, 2010

As of around 2:30 a.m. EDT, the markets were acting clueless on a slow-news night. It would be surprising if there were no follow-through to Friday's selloff, but it won't be much fun for DaBoyz unless they are able to distribute stocks at higher levels before the opening bell.

Our minimum downside objective for the near term is still 1179.40, the Hidden Pivot midpoint of a pattern that projects as low as 1140.10.  There is a second bearish pattern that we are watching as well with an 1186.90 midpoint (already breached, albeit only slightly) and an 1155.00 'D' target. Alternatively, a print at 1226.30 is needed today or tomorrow to suggest that bulls are once again taking charge.

Two days later, and already I've forgotten just what was supposed to have caused stocks to fall so hard on Friday. In any event, the selloff brought a 1035.75 midpoint support into play as a logical minimum downside objective. The target is shown in the accompanying chart, and it looks compelling enough to suggest we should hold a bearish bias until it is reached. A short or a long derived from the target should be tied to a camouflage entry, since Sunday night's flabby action looked "difficult" to short, and because midpoint supports off the daily chart will rarely be precisely reliable for bottom-fishing.

It’s high summer here in Colorado, with the mercury at 93 – possibly the coolest day we’ve logged all week. Our car thermometer registered 108 yesterday, but surely this was a mistake?   You don’t hear many complaints, though, probably because the humidity is so low hereabouts.  In the winter, with the heat cranked up on a cold day, we’ve seen the humidity fall below 10 percent inside the house – practically as dry as the Gobi Desert. On the comfort index, a 93-degree summer day in Colorado feels like maybe 77 degrees in Baltimore.  When we moved here from San Francisco in 1999, many of the things we brought with us that were made of laminated wood dried out and cracked after a few years: cutting boards, a coffee table, dining room chairs.  Anyone planning on moving to this region of the country with a Bösendorfer should consider selling it and buying another piano when you get here, since the climate change is bound to play havoc with the instrument’s soundboard. At this time of year, newspapers seem to suffer heat stroke before the rest of us.  We searched in vain for the obligatory boy-in-the-well story, but perhaps the editors are saving it for August. The big news over the weekend was that BP’s oil cap appeared to be holding, and that pressure levels were sufficient to suggest the well-bore is intact. Unfortunately, good news is no news as far as the tabloids are concerned, and so this very encouraging development in the Gulf didn’t even rate a mention in the “Editor’s Picks” of the New York Daily News. As of late Sunday afternoon, here are some of the stories that did make the list: 1) Biden Defends Tea Party Against Racist Claims; 2)  Neo-Nazi Groups Patrol Arizona-Mexico Border; and, 3)