Friday, February 11, 2011

No change.  A toothsome target at 1379.80 remains my minimum upside objective for the near term. It is a bullish sign that most of the price action over the last several days has occurred above the 1362.00 midpoint pivot associated with the target.

A prior peak at 30.885 is still the benchmark to beat if bulls are going to rattle the bad guys next week.  The task shouldn't be too difficult, since the futures have plenty of wind in their sails from numerous minor, bullish patterns. One that I especially like projects to 31.02, and although it's about as obscure as they come,  it has two things going for it: 1) the k-A segment and B-C look like they could be siblings, at least in hillbilly country; and 2) price action during the last few days has centered on the 30.14 midpoint associated with the target.  If the week ends with the futures settled above that number, my hunch is that things will go smoothly for bulls in the days ahead.

The pattern shown in the chart is as phony as a zircon, since its point 'B' failed to surpass any external peaks, and also because the initial thrust from 'A' has so far produced no fewer than three tentative 'C's.  We'll put all of that aside, however, to project a minimum 88.40 on the next thrust, since the futures look oh-so-eager to ascend. If the target is reached, that would refresh the bull trend by surpassing the external-ish peak at 88.11 recorded on Tuesday.

In today's E-Mini S&P tout, I've alluded to a possible perfect buying opportunity for night owls and camouflageurs.  The chart is reproduced alongside, and I'll leave it to you to discover its one flaw.  However, the problem is not serious enough to put me off the trade if the opportunity should arise as shown, however, everything else about the pattern is quite pleasing to the eye.   Please note that fresh touts for gold and silver will be out later tonight.

Old timers might remember a day when such carnage as we witnessed yesterday in Cisco might have caused more than the piddling drop that occurred in the Dow and Nasdaq indexes.  Assuming that that's as bad as things are going to get for now, we'll look for the E-Minis to go bounding higher today, drawn magnetically toward our 1356.00 target as Icarus toward the sun.  The futures never even made it down to a 1313.25 midpoint support where, during an impromptu online session yesterday, we had determined to get long with a three-tick stop-loss.  A bullish impulse leg created on the 30-minute chart toward the end of the session was squandered when a lesser, bearish one ensued, leaving night owls and camouflageurs to discover what they will.  The chart accompanying comments under 'Today's Action' shows what a near-perfect buying opportunity might look like. My short-term bias as of around 7:30 p.m. EST was very slightly bullish, but a print at 1320.25 would turbocharge it. _______ UPDATE (10:14 a.m. EST ):  It took all night for a camouflage trade to develop, but if you want to see what  pportunity looks like, check out the A-B impulse leg that finally signaled the turn. On the 30-minute chart, A=1310.00 at 5:30 a.m. EST; and B=1315.75 at 9 a.m.  All three coordinates are single-bar, and they indicated a 1314.75 buy-stop entry a little more than 30 minutes into today's session.

With The ‘Nank in the hot seat on Capitol Hill Wednesday, our good friend Doug – “the savviest financial advisor we know”  – called to ask whether we were seeing any signs of a paradigm shift on our charts. That would be logical, he said, since the Fed Chairman appeared to be preparing his Congressional inquisitors and the news media for nothing less than The End of Quantitative Easing. Our own reading of Mr. Bernanke’s intentions, based on news reports, was that he was preparing us for more of the same, although he did pay lip service to the idea that, at some point, the Fed would have to tighten. Dow Jones wire service paraphrased him as follows: “[Mr.] Bernanke…sought to reassure lawmakers the Fed wouldn't allow inflation to take root in the U.S. by waiting too long to tighten monetary policy, but gave no indication he is ready to do so right now.”  Although The ‘Nank’s bloviations were much less opaque than the cryptic double-talk we used to hear from Mr. Greenspan, they didn’t provide much reason for us to think that monetary austerity is about to become an actual policy option any time soon. Whatever the case, there was no paradigm shift evident on our charts. T-Bond futures, for one, did not surge to create a bullish impulse leg on the hourly chart (although they could conceivably do so today, so we’ve reserved judgment).  We credit the Dow Industrial Average for having read the Nank’s performance just about right, ending the day up an insignificant seven points. That is not to say traders failed to give the Fed chief his due. In fact, they added a little buying frillip at the close that hauled the blue chip average out of the red, where it had languished for the