The gentrified hoodlums who manipulate this stock for a living are so brazen about it that they insist on leaving their fingerprints at the scene of each new shakedown. Every major swoon has trampolined from within inches of a round number that seems to have been pre-determined, if not to say ordained. Thus, on the day of the May 6 Flash Crash, did a few more-than-merely-lucky souls manage to buy or cover short AAPL shares at 199.25 — $59 below the intraday high! More recently, when the same thimble-riggers yanked the rug out on September 28, producing an instant $17 drop, they created yet another telltale low at exactly 275.00. And yesterday, when opportunity knocked in the form of bad news for perhaps every stock but Apple, DaBoyz were waiting at 300.02 — down nearly $18 from the previous day’s close – to glom as many shares as they could get their slimy hands on before running the stock back up by nearly $14.
Fortunately, these deftly executed gambits can do little more than annoy us, since the two November 300-310-320 butterfly spreads that we own cost us practically nothing — $20 per — and yield a potential gain of as much as $2000. In the chat room on Tuesday, I suggested elongating our theoretical profit zone by buying a vertical spread if and when AAPL comes down to a midpoint support at 304.68. But because this would entail legging into a more complex position on the anticipated rally from that number, I wouldn’t attempt it unless you are very experienced at trading options. If I’m in the room when the opportunity arises, I’ll furnish further details. In any event, the 304.68 pivot is a good place to look for a tradable bounce. If AAPL is invincible, as I believe it very nearly is, then any selling in the days ahead should not violate the support.
For reasons noted here earlier, a push today exceeding 78.69 would create a bullish impulse leg of daily-chart degree, clinching a week or two (or perhaps more) of vexatious feistiness that could test bears’ mettle. The last time this happened was back in December, and the rally that ensued lasted for six months, adding nearly 20% to the dollar’s ostensible value.
If we accept that yesterday’s selloff was so transparently corrective as to have changed nothing about the long-term bullish picture in Silver and Gold, then we must also accept that the broad averages too will soon be bounding blithely higher, perfectly oblivious to the real world and driven by otherwise inert “stimulus” money. Technically speaking, the first convincing sign of the E-Mini’s resurgence would come at 1178.25, since it is there that a bullish impulse leg would become manifest on the hourly chart. Night owls can try bottom-fishing at the ‘p’ of the still-forming abc downtrend on the right-hand edge of the chart.
Unlike December Gold, December Silver has paid no heed to a midpoint support at 23.515 created on the hourly chart by yesterday’s nasty selloff. The implication is that the selling will continue at least to the support’s ‘d’ sibling, 23.040. Gold could wind up pulling Silver higher, but it might be the other way around, with Silver leading precious metals lower. In any event, we should want to see a bounce exceeding 24.015 before we infer that the bulls have regained the advantage. As in December Gold, that would creat a “soft” impulse leg on the hourly chart.
Around 11 p.m. Tuesday, the futures appeared to be rebounding from a 1328.00 Hidden Pivot midpoint that was mentioned numerous times in the chat room. I flagged it myself late in the session, but so had at least two other chat-roomers — Harry, and Gonegolfin’ (aka Brian, a graduate of the last Hidden Pivot webinar). Does this mean the correction is already over? It’s possible, although to be more confident about it I’d want to see the rally hit 1359.00, generating a “soft” impulse leg on the hourly chart. (The peak to be exceeded at 1358.90 is not well developed, and that’s why its breach would be less-than-decisively impulsive.) At any rate, the fact that the selling has been discernibly reversed precisely at the midpoint pivot hints that bears will not find it so easy to beat down gold for a second consecutive day. If they take another whack at it, though, a Hidden Pivot support at 1308.60 should be used as a minimum downside target. It is the ‘d’ sibling of 1358.00 and will remain valid as long as 1347.40 (point ‘C’) has not been exceeded to the upside.
The futures would have to fall all the way to 127^23 to cast serious doubt on the intraday charts and the long-term bullish case, but for now it’ll take only the breach of a midpoint support at 131^27 to imply the bears still rule the minor cycle. A precise bounce there followed by a failure of the support would imply more downside over the near term to as low as 130^06.
The Dollar Index didn’t get past either of the two important peaks flagged here yesterday, and, to make matters worse, DXY couldn’t even muster the two additional ticks it would have taken to surpass the 77.65 look-to-the-left peak identified in the chart (see inset). While it’s still too early to write off this two-day-old rally, signs that the long-term downtrend will soon resume are too obvious to ignore.
The gentrified hoodlums who manipulate this stock for a living are so brazen about it that they insist on leaving their fingerprints at the scene of each new shakedown. Every major swoon has trampolined from within inches of a round number that seems to have been pre-determined, if not to say ordained. Thus, on the day of the May 6 Flash Crash, did a few more-than-merely-lucky souls manage to buy or cover short AAPL shares at 199.25 — $59 below the intraday high! More recently, when the same thimble-riggers yanked the rug out on September 28, producing an instant $17 drop, they created yet another telltale low at exactly 275.00. And yesterday, when opportunity knocked in the form of bad news for perhaps every stock but Apple, DaBoyz were waiting at 300.02 — down nearly $18 from the previous day’s close – to glom as many shares as they could get their slimy hands on before running the stock back up by nearly $14.
Some Days, Everyone Simply Gets It Wrong
by Rick Ackerman on October 20, 2010 4:09 am GMT · 9 comments
Let’s see if we understand yesterday’s earth-rumbling response to China’s 25 basis-point increase in a yuan lending rate. For starters, the dollar had its biggest one-day rally since August (which, to remind you, went nowhere; the dollar wafted slightly higher, then scuddled sideways for nearly a month before resuming its long-term bear market). Another effect of China’s decidedly un-momentous change, which supposedly was aimed at damping real estate speculation and inflation, was that bullion had its worst day in recent memory. Comex Gold and Silver futures contracts were down nearly three percent, and there was little evidence at the bell that bullion’s inevitable rebound was immediately imminent. And, finally, we saw the heaviest selling of equity shares in » Read the full article