Thursday, July 22, 2010

Commodity-market round-ups highlighted crude's move above $78 yesterday, but as far as I'm concerned it was a dud even before the futures reversed direction. On the hourly chart, the morning surge failed to clear even a single external peak on the hourly chart.  While this is not an explicit sign of weakness, it does suggest that crude is in no great hurry to break the $80 barrier this summer.  July's move from the low $70s has been robust, but it would appear to have run its course.

Wow, these guys are really good!  No sooner had They finished shaking down widows and pensioners on a worrisome drumbeat of bad-antenna news than DaScumballs detonate a breathtaking, $14 short-squeeze on yesterday's opening bar, reaming shorts a dandy new orifice. Finally, on the off-chance that there may have been a survivor or two, They dropped the stock $11 before the closing bell.  We saw the  wave of buying coming, but so will everyone  else the next time, since Apple has shown itself to be all but impervious to bad news -- a money-making machine.

Assuming 1186.60 is not exceeded to the upside first, the minor downtrend shown in the  chart points to at least 1180.90, a midpoint support, or to 1175.20 if any lower. The latter number is just a dime above Tuesday's presumably supportive low, and so it has little value for trading. However, if it is breached by more than 60 cents, or if the futures close below it, that would strengthen the case for more downside to at least 1140.10, a Hidden Pivot target drum-rolled here earlier. ______ UPDATE (11:32 a.m. EDT) :  Saved -- for now -- by the midpoint pivot!  The futures fell to exactly 1180.70, two ticks from the support, then turned energetically higher.  The nearly $22 rally has given Gold some breathing room, but it would need to go $7 higher to qualify as impulsively bullish on the 30-minute chart.

The gnarly bull pattern to 1093.75 or higher is still valid in theory, but we should focus on bearish possibilities right now, since, as of early Thursday morning, the futures have been tracing out a distribution below the 1065 midpoint support of the larger pattern shown in the chart. The downtrend projects to 1043.75, yielding the equivalent of a 170-point fall in the Dow.  A lesser pattern projects to 1047.25, and you can try bottom-fishing there with a stop-loss as tight as 3-4 ticks if the opportunity arises before 2 p.m. EDT. (We'd want to be out of the position before the bell.)  The pivot at 1043.75 could also be bought with a very tight stop-loss, but the lesser pattern looks more promising. _______ UPDATE (11:17  a.m. EDT): The futures have gone the "wrong" way today, Banshee-screaming their way up to 1093.50 (!) s0 far. Perhaps it is a reaction  to the latest increase in joblessness? Or a delayed reaction to the Depressionary implications of the steep new decline in home sales?  Or maybe it's jobless speculators, thrilled with the latest forever-and-a-day extension of their unemployment benefits and eager to deploy a portion of their new lucre in index futures? We'll probably never know which, or why, but it is clear that Wall Street is in an exuberant mood this morning. If you shorted the top as was possible using my target, take partial profits, keep a tight stop, and don't trust the little sonofabitch for even a minute.

(My wife Marilyn, no great fan of our President, is alarmed over the Administration’s veiled attempts to regulate and ultimately control the Internet. The supposed goal of providing “equal access” to everyone is the Trojan Horse here, and although we are confident Internet users are strong enough to defend the medium against whatever radical-leftist depredations Mr. Obama may have in mind, we are not so blithely unconcerned as to ignore the threat entirely. Marilyn’s essay explains what’s at stake. RA) Why should the FCC regulate the internet? Well they shouldn’t, but that hasn’t stopped legions of media watchdogs, consumer advocacy groups and every talking-head panel on PBS from heralding the dangers to our public welfare if the Feds don’t take over the internet “for the people.” These do-gooders want the FCC to classify the internet as a telecommunications service, which would give the Feds the power to regulate who gets the service (everyone!), how much it can cost (profit should not be the issue here) and how each bit traveling through the pipes must be treated…(why, fairly, of course). Oh, and they can make the ISPs pay into a federal universal-service fund used to provide telecommunications services to poor areas. This must be done, they say, to keep the internet "open" and fair. What’s at stake? It appears a lot of hypothetical “threats” to our freedom to send and receive the information we want through the pipes owned by private, profit-mongering companies like Comcast, AT&T and Verizon. Charges that these capitalistic behemoths can’t wait to choose favorites and pick winners among content providers drives the social justice wonks to the perverse conclusion that an all-encompassing Federal regulation is the only solution to the problem. What problem? Apparently, there have been two breaches of bit-rate “neutrality” in seven years, one of them