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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
Yesterday’s metaphysically enfeebled rally was a downpayment on a bigger push to at least 1136.50 that I’ve projected for the week. I’ve reproduced a chart that shows an intraday high that missed its 1112.00 target by a single tick. Was this foretold by the single-bar A-B-C coordinates I’ve highlighted? As far as I’m concerned, you can never go far wrong falling crazy-in-love with patterns described by three single-bar highs/lows. For trading purposes, night owls might want to focus on the tail end of the chart, with its bull ABC projecting to 1115.25. Catching a ride north will carry the same risk as last night, however: all intraday patterns point higher, ensuring that “everyone” will be trying to get long. _______ UPDATE (10:39 a.m. EDT): The futures ensured that only a very diligent few would catch the rally when they launched at 2:15 a.m. off a gratuitous dip beneath Monday night’s lows. The high was 1118.75 — achieved, of course, on the opening bar. ES then retrenched to a so-far low of 1109.50, presumably to load up for the next push.
The pattern highlighted in the chart continues to trumpet a target at 1140.10, a by-now familiar Hidden Pivot support that can be bottom-fished aggressively with a stop-loss as tight as you can handle. Traders should be alert for a potentially tradable bounce from 1155.00 as well, since there’s a lesser pattern with a ‘d’ target at that price. That last number should be considered our minimum downside projection for the near term, although the bearish outlook is nothing that a thrust to an old and familiar look-to-the-left peak at 1222.90 wouldn’t cure. _______ UPDATE (2:50 p.m. EDT): Gold plummeted $26 this morning, bottoming at 1156.90. While this came pretty close to out target, it was not quite close enough to trigger a bottom-fishing bid (which you should cancel in any event). The target remains valid, but the so-far feeble bounce lends even more weight to the 1140.10 target.
Silver’s intraday charts continue to look more encouraging than Gold’s, although it seems likely the latter will drag the former lower rather than both heading higher on Silver’s strength. If there’s a bullish surprise, however, use a midpoint resistance at 18.330 as a bullish “trigger” threshold for a further move to as high as 18.680.
There’s no predicting how high this squeeze will go, although a doubling off June’s $27 low should probably suffice to extinguish whatever temptation may have existed in this world at one time to short the stock. Paradoxically, one cannot help believing that BP shares are destined to fall below $5 — w-a-a-a-y below – if one ponders Matt Simmons’ version of the story. He thinks the riser cap is just a stall tactic and that BP will eventually face tort liability for destroying the Gulf of Mexico and probably much more. Click on the link above and you may even find yourself agreeing with me that, most unfortunately, he still does not sound quite like a whack-job.
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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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Forecast Leaves 232 Dow Points to Go
by Rick Ackerman on July 27, 2010 12:45 am GMT · 3 comments
Stocks on Monday achieved a bit less than a third of the gains we had unenthusiastically projected for the week, with the Dow Industrials settling exactly 100 points above Friday’s close. We say we were unenthusiastic in forecasting a 350-point rally because share buyers themselves have shown little enthusiasm for the task. Even so, they’ve continued to lift offers more or less steadily, producing a rising trendline with a pitch of about 12 degrees. We’ve seen steeper grades driving through Nebraska, but that’s not the point. In fact, the lukewarm, steady buying that has persisted in July is exactly the kind of buying that typically accounts for most of the stock market’s gains most of the time. This summer’s rally has been punctuated by short squeezes and gap-up openings » Read the full article