Thursday, February 3, 2011

The rally projects most immediately to a Hidden Pivot at 1.3927, implying that the best spot to look for a camouflage long-entry opportunity would be around 1.3746, its midpoint sibling.. The easiest trade that can be culled from this projection would be a short from 1.3927, stop 1.3932. Make the order good through Friday.

The upthrusts have diligently been doing their job, refreshing the bullish impulse on the hourly chart at every opportunity.  Most immediately, Hidden Pivot signs point to a rally target at 29.645, predicated on a close above its midpoint sibling, 28.585.

No change.  A pop exceeding 1354.00 would enhance a tired, albeit moderately bullish, short-term picture, putting a 1360.30 target in play for pass-line bettors. The futures have seemed adamantly determined not to give up ground for the last week or so, other than when shoved by the bad guys when there was some piece of news that could be construed as less than glowing for bullion.  News will probably continue to drive gold's price action, but one shudders to think about how scary it would have to be to push quotes...higher.  ______ UPDATE (1:16 p.m. EST): After a gratuitous feint lower early in the session, the futures got in bullish gear  with a so-far $31 spike that reamed shorts and sellers a new orifice.  The intraday high as of this moment is 1356.60, but the 1360.30 target would appear to be in-the-bag.

The rally pattern shown in the chart is just gnarly enough to appeal to the twisted Pivoteer, so if you fit that description -- or even if you only aspire to the dementia that day trading can sometimes induce in people who are otherwise mentally sound -- let's try shorting its 'D' target, 12035, via a 12034 offer and a 12038 stop-loss.  The pattern is reproduced alongside for your delectation. _______ UPDATE (4:04 p.m. EST): The target was a dead-center bullseye, allowing us to get short precisely at the intraday high, 12034.  A pullback so far to 12009 has provided a cushion, but anyone who took this trade in the final minutes of the session will have to be diligent in applying a stop-loss after-hours.  You're on your own now, but I'd suggest covering half of any multi-lot position at a current price of around 12012.  Of what remains, keep a contract or two for a possible home run. If you hold just a single contract, trail a stop so that you can profit from further weakness while ensuring that the possibility of an actual loss is remote. _______ FURTHER UPDATE (February 4, 12:36 p.m. EST): The futures dipped no lower than 12005 overnight before this nasty little ferret lunged for the ankles of shorts. The rabid price action that has followed this morning took the futures as high as  12053 and as low as 1198o, all signifying nothing in particular.  We'll continue to short this and other index vehicles at every promising Hidden Pivot top simply because we can do so with little or no risk.  In fact, and as you will have surmised, we can often make a small profit even when we have guessed "wrong." 

To remind you: We're focused on two objectives right now: 1) Shorting 1356.00, a compelling Hidden Pivot target that's been in our sights for a while; and 2) guarding diligently against the possibility that this Mother of All Bear Rallies will die without having reached the target.  More immediately, though, traders with infinite patience can try to leverage yesterday's soporific tedium by staying alert to any impulsively bullish thrust on the three- or five-minute chart. Relatively few of our competitors are likely to care about such things after yesterday's death dirge, and that is why a possible change in the pattern spells opportunity.

[Egypt veered toward civil breakdown yesterday as protests turned violent following a speech by President Hosni Mubarak that took a hard line against demonstrators’ demands.  Following is a timely commentary from Cam Fitzgerald, a frequent contributor to Rick’s Picks and the readers’ forum.  RA]  It really is very unfortunate what has transpired in Egypt over the past few hours. The country has abruptly lurched from a peaceful populist uprising against a despised leader and into the makings of civil war within hours of Mubarak’s speech to his countrymen. This is not a big surprise. The leaders of the uprising had demanded nothing less than Mubarak’s immediate ouster. They painted themselves into a corner with a demand that was sure not to be met. When Mubarak subsequently stated that he will stay on for nine more months, the balance of his term,  AND seek to arrest those that were responsible for the instability, arson of buildings and vehicles etcetera, Egyptians everywhere knew instantly that the seeds were sown for an explosive outcome in the words of his speech.  Mubarak said exactly what was guaranteed to make the protesters as uncomfortable as possible. Their worst fears materialized instantly. The much hated leader basically told them he would stick around to pay back those who stood up against him. His words were a clear threat and a recipe for disaster, as every Egyptian heard exactly what was really encoded in his message. I just shook my head in disbelief as I listened to the “analysis of the moment” by one of the media talking heads as she spun the speech in a positive way to leave the impression that Mubarak was an honourable leader who had worked hard to serve his country. Indeed, Mr. Mubarak himself stated that he had “exhausted his life”