Tuesday, November 30, 2010

Silver seems so comfortable cruising at 30,000 feet, just below a multi-decade high that looks like Everest on the weekly chart.  More of a correction would have been the gentlemanly thing to do, but bulls seem to have other designs -- namely, the impalement of all the dirtballs who for decades have made too easy a living holding prices down. Monday night, the futures were retracing an exuberant, after-hours war-whoop to 27.490, tracing out an abc correction that could bring them down to as low as 27.020.  Night owls can try bottom-fishing at the midpoint, 27.170, using a stop-loss as tight as 27.160, although two more ticks would give you an extra "structural" support to lean on on the two-minute chart. _______ UPDATE (10:40 p.m. ET):  Looks like the criminal element has control at the moment, although in crashing the futures in the space of  single minute, they failed miserably to make the 27.020 target highlighted above irrelevant.  It is in fact the evening's low as of this moment, and if you had a stink bid in I'd suggest taking some profits now, with the futures trading 27.105.  A break-even stop should be used for what remains.

Short-term signs portend a modest rally to 1377.60, but you'll have to improvise your own way aboard, since the five-minute chart that might allow decent camouflage has become too cluttered and claustrophobic to yield one glow-in-the-dark opportunity.  There are in fact many of them, but they are changing from one hour to the next.  FYI, the midpoint resistance by which you can judge the sincerity of any breakout lies at 1370.70.

The painfully constipated price action of the last two weeks argues against our trying to swing-trade this vehicle. It's for day traders only at the moment, and my bias from a Hidden Pivot perspective is mildly bullish, since no "external" lows on the daily chart have been breached in the pullback from the 1224.50 high recorded on November 5.  Night owls should check out a very minor corrective pattern on the 5-minute chart that could conceivably allow tightly stopped bottom-fishing at an 1183.00 pivot. _______ UPDATE (3:14 a.m. ET): The futures dipped to 1181.25 before the bounce we were expecting happened, but the best you could have done was grin and bear a five-tick ($62.50) loss if you'd traded this one without camouflage.  The countertrend rally is perfectly clear on the five-minute chart and should be assumed headed for at least 1194.75 once midpoint resistance at 1188.00 has been surmounted. 

We'll put plans of legging into a bullish butterfly spread on the back burner for now, since AAPL looks like it could noodle around for a while -- for a long while, perhaps.  The next moon shot has the potential to reach 393.51, but it's possible the stock could pull back to as low as 240-250 to stage for it. That implies a bearish butterfly opportunity centered on the 250 strike, but it could be a tortuous wait, since there are no strong indications at the moment that AAPL is keen on correcting much lower than around $300. A flash crash shakedown could do the trick, but were it to occur, we probably wouldn't have enough time to exit the butterfly at the fat profit a swoon to $250 would likely provide.

After a long holiday weekend, U.S. stocks came stumbling out of the gate Monday, unable to determine how, or even whether, they should react to yet more “strength” in the dollar.  We’ve wrapped the word “strength” in quotes because it is only in relationship to a euro enfeebled by financial crisis that the dollar could ever appear to be strong. And so it was yesterday, with the Dollar Index rallying to within 0.66 points of an ambitious, 81.80 target we’d sent out to subscribers the night before.  We had thought the latest eurocrisis had been laid to rest with the imposition last week of a bailout package on Ireland. The country had officially requested help, after all, and one might have thought that the ratification of the deal would have been automatic.  Turns out, the Irish people themselves will have a say, since their parliament will meet on December 7 to pass a budget that may or may not incorporate the provisions of the bailout.  Those provisions evidently were not buried in fine print, since fully one percent of Ireland’s population marched on Saturday to protest them – to protest the tough strictures that the bailout, worth an estimated €85 billion, would impose.  For starters, any money borrowed would have to be repaid at 6.7%, a return that even the most aggressive hedge funds are not achieving in these deflationary times. And for two, the Irish would have until 2015 to get the budget deficit down under 3% of GDP, in accordance with EU rules. If that’s the best that lenders have to offer, then at least 50,000 to 100,000 Irishmen who marched over the weekend would rather tell the IMF to shove it than accept all the strings that would come attached to the deal.  And If the Vote Is