Monday, July 26, 2010

The lesser charts were transformed into rubbish by last week's price action, but we can still use a vague midpoint support at 1182.80 to warn of the next bout of pseudo-weakness.  Its breach on a closing basis would portend possible additional downside over the near term to 1161.70 -- one downside target among many at this point.  Alternatively, an upthrust today touching 1207.00 would put bears mildly on-the-run.

The E-Minis finished last week with a menacing glower that translates into a possible 350-point Dow rally this week. That would be more than a run-of-the-mill short squeeze, but odds will shorten if DaBoyz put bears on-the-run in the first hour this morning with a thrust of 100 or more points.

The next upthrust has the potential to reach 131^05, so we should look diligently for ways to buy this minor correction.  I'll recommend a 126^08 bid, stop 126^04, but you should be on the lookout for camouflage opportunities arising from any minor ABC rally, since it's possible the futures won't retrace all the way down to the Hidden Pivot support at 126^07. As of around 9:30 p.m. Sunday night, the three-minute chart looked like the best place to scout for the turn. _______ UPDATE (10:45 a.m. EDT): The futures dove sharply to a low at 126^11, three ticks from our bid, before bouncing robustly. Cancel the order, since our odds will never be quite as good when we settle for sloppy seconds. The original target remains theoretically valid nonetheless.  For the record, there was a camouflage entry signal  at 126^17 around 10:06 a.m. EDT that would have gotten you long for a very short ride to as high as 126^26.

Today's E-Mini S&P tout alludes to the possibility of a 300-point rally in the Dow, but the exact target is 10757, implying a surge of about 350 points. That's a Hidden Pivot, and, as is the case with the E-Minis, Friday's pop destroyed the midpoint resistance (10383).

The bull pattern shown in the chart projects to 1136.50 -- equivalent to a rally of about 300 points in the Dow. The 1093.75 midpoint resistance put up a good fight as last week drew to a close, but in the end, as we have seen so often, selling was overpowered by short-covering.  As of around 9 p.m. EDT Sunday night, the futures were on a minor "buy" signal tripped at 1101.00. The rally appears likely to hit 1107.75 if the 1103.25 midpoint is exceeded, but you'll have to board this one on your own, since there are too many obvious ABC patterns pointing higher, and therefore the potential for numerous stop-outs below a series of 'C's.

It’s not your imagination -- even ostensibly “exciting” stocks have been screwing the pooch since spring. Apple, for one.  In recent weeks, it has been one of DaBoyz’ favorite con-jobs because of a signal-reception problem in the iPhone4. When news reports concerning the product’s poorly designed antenna maxed out a little more than a week ago, it looked like a major corporate blunder. We don’t mean the kind of blunder that would ultimately affect the bottom line more than a jiggle or a jot; rather, the story provided a perfect excuse for institutional buyers to shake the stock down so that they could steal it at fire-sale prices from widows and orphans. The last time AAPL was manipulated in this way, it was a riskier bet, since the story that was used to move the stock up and down concerned Steve Jobs’ health. Reports of his battle with a rare form of pancreatic cancer first surfaced in 2004, but the prognosis – and the stock itself – were subject to wild swings until last summer, when he underwent an evidently successful liver transplant. The procedure quieted the rumor mill, allowing AAPL to waft higher on its merits. Now the same institutional arse-bandits have milked the antenna story for all it’s worth, and we can hardly wait to see what ploy they concoct next to make the nervous Nellies doubt anew that Apple’s future is any less than stellar. As you can see in the graph, however, the company’s shares have gone nowhere since April. For all the sound and fury, AAPL has been in a holding pattern since then, albeit one with the potential to provide a base for a thrust to $300 and beyond. The fact that all of the price action has occurred above the midpoint of the