Yesterday was most impressive — if tedium is the yardstick. Even though we found the best opportunity of the day during an online trading session, initiating a long position a tick off the intraday low, it went nowhere after an initial run-up of 8 points. The implied, theoretical gain of $400 is not bad, considering we risked only a theoretical $50 at the outset. However, we were denied an additional $800 of profit per contract when the futures failed to even head-fake a run at their actual target of 1159.75, 16 points higher. This was pretty sobering. We are constantly reminding you that there is virtually no bullish buying in this market — only short-squeeze rallies that lift the futures from one resistance level to the next. All of the evidence suggests this is true, but we are still amazed at how the dynamic sometimes seems capable of propelling stocks upward indefinitely.

There is no real selling either, presumably because individual investors are out of the market, and that has been a factor in the rise of shares. But the by-now predictable pattern of tedious, turgid consolidation until the next short-squeeze has been primed has made market-watching almost unbearable. There is unlikely to be any excitement today either, but if you’re looking for (relatively) easy opportunity, try bidding a tick above a Hidden Pivot support at 1133.25, stop 1132.75. You’ll be on your on if the order fills (which could conceivably happen overnight), but that would pre-empt the 1159.75 target, replacing it with another at 1164.00 — a Hidden Pivot midpoint — and its ‘D’ sibling at 1164.00. _______ UPDATE: The overnight low was 1134.25, so we missed getting on board the gratuitous, 19-point trash rally that followed by three ticks. The futures eventually detumesced back down to the pivot, but we just watched, unenticed by sloppy seconds.

WSJ Finally Notices Gold’s Bull Market

by Rick Ackerman on September 30, 2010 1:35 am GMT · 29 comments

Should we be worried now that the Wall Street Journal has “discovered” the bull market in gold? Relax. This bull market has years to go. It’s so powerful, in fact, that it will easily be able to shrug off yesterday’s front-page headline in the Journal, “Gold Vaults to New High,” and continue into the ozone. With the price of gold up 353% since 2000, the Journal was bound to notice the bull market sooner or later. A related headline on page two further qualified gold’s leap to new record highs as being related to “global worries.” This is true as far as it goes, but it overlooks the fact that gold has risen even in years when we weren’t so worried. And that is what we like most about the bull market in bullion: Whatever investment “story” has been out there over the last decade, gold as » Read the full article

Sept 29, 2010: A Perfect Trade in the E-Mini

by Rick Ackerman on September 29, 2010 8:56 pm GMT

We caught a beautiful bottom in the E-Mini S&Ps, using a somewhat tricky pattern to get long a single tick beneath what turned out to be the low of the day. This was done bottom fishing-style – i.e., without camouflage — because the set-up looked so enticing. The actual trade had been advised earlier that morning during a “trading room” session attended by more than 100 people. It was an hour later, during the weekly tutorial session, that we reviewed the trade and my rationale for using a 1.00-point stop-loss. (I’d dithered over using a two-tick stop (!) but eventually decided to go for, um, broke.) We also looked at Gold and Silver as usual, finding an additional reason to take seriously a 22.505 target for the December contract that I’d been drum-rolling for weeks.

HUI – Gold Bugs Index (Last:513.62)

by Rick Ackerman on September 29, 2010 12:49 am GMT

On the daily chart, a major Hidden Pivot at 558.55 can serve as a minimum upside objective for the near term. However, if it’s exceeded on a closing basis, or intraday by more than a couple of points, we should infer that the 576.19 target of an even larger pattern is in play. Both patterns are shown in the accompanying chart, and in each instance the rally had little trouble getting past the respective Hidden Pivot midpoint. This bodes well for a presumably imminent attempt to surpass the watershed peak at 516 recorded in December 2009, although I don’t expect this feat, which could be achieved as early as today, to evince much strain.)