Friday, March 4, 2011

I like the 33.780 Hidden Pivot shown in the chart for bottom-fishing today, although it doesn't come with an ironclad guarantee.  A three-tick stop-loss should suffice, since the pattern is formed from three delicately precise coordinates.  FYI, I took a 20-minute break after writing the foregoing, and now, as of around 7:30 p.m., the futures were in a moderate rally that diminished the appeal of the pattern.  The bottom-fishing strategy will remain viable, however, as long as the point 'C' of the pattern, 34.615, is not exceeded to the upside.

Bears could have taken no pleasure in yesterday's shakedown, since each nasty leg down was followed by an almost equally nasty reaction. If the correction retraces half of the rally from the January 28 low, that would imply a bottom at 1375.10; if 0.618 is retraced, that would put the low at 1358.50.  My gut feeling is that the futures will have to come down to at least 1396.30 before they are recharged for another upthrust.

We're long a single March 57 put for a 0.12 credit, meaning we cannot lose no matter what happens.  The QQQs could go as high as 62.09 if they follow the same long-term abcd pattern as the Mini-Dow and Mini S&P, although that would imply a much more powerful last-gasp spike. Accordingly, we'll plan on buying eight April 60 puts, no stop, if the Cubes get within a nickel of 62.09.  We'll also look to buy four April 59 puts if the rally hits 59.78, a lesser Hidden Pivot target.  In this case, though, we'll stop ourselves out if the QQQs touch 59.93.  ________ UPDATE (March 16, 2:55 a.m.):  Since "easy" trades like this one are intended to help pay for your subscription, I'll recommend offering the put to close for $350, good-till-canceled. -

A 12412 target identified here a while back remains viable, so let's plan on shorting there with a stop-loss at 12421.  As is the case with the E-Mini S&Ps, my preference is to initiate the trade using camouflage.  I don't usually advise getting involved on a Friday afternoon, but in this case, because a short-squeezy high on a Friday close would bamboozle even those who have been eager to get short for...years, scaring them from dong the right thing, I'll make an exception. _______ UPDATE (Sunday, 8:28 p.m. EST):  The futures went the wrong way, but the target and the suggested trade remain viable.  Night owls can look for bottom-fishing opportunities at 12109 and/or 12041.

We still have a longstanding target at 1356.00, a number that feels just about right for a potential top if there's follow-through from yesterday.  A thrust to that number would put the E-Mini S&Ps marginally above the so-far 1343.00 high of the Mother of All Bear Rallies -- just enough, presumably, to set the hook for all the lunatics who will be dancing in the streets down in the Battery. As before, I'll suggest shorting 1356.00 with a stop-loss as tight as 1357.25. My preference, however, is that you initiate the short via camouflage, since the wild ups and downs of the last two weeks may have diminished the reliability of the target somewhat.

Yesterday's call here for a 500-point Dow rally may prove to have been one felicitous step ahead of the news.  With the U.S. economy headed into deepest recession, if not outright collapse, nothing makes me queasier than putting out such a bullish forecast. And yet, once again, mechanically following the discipline of the Hidden Pivot System has kept me honest and alert. Under the circumstances, there was no ignoring the fact that a bull cycle now five weeks old easily penetrated a key midpoint resistance on the E-Mini S&P's hourly chart.  Whether this portends stupid new highs for the broad averages and yet more hubris on Wall Street remains to be seen.  Whatever happens, though, we'll be ready.

(Expanding on a commentary aired here earlier in the week, my wife Marilyn has written below about her own experience in preparing for possible food shortages. The essay contains tips and links for do-it-yourselfers as well as for those who don’t have time to gather the necessary resources themselves.  RA) A recent commentary here regarding the possibility of food shortages in the U.S. elicited quite a response, especially from those who are hunkering down in anticipation of a full-blown cataclysm. There is certainly evidence that even if  a total disaster doesn’t strike, there will be food shortages, and what food does make it to the store shelves will be more expensive – possibly much more expensive. Rather than honing my gun skills and digging a bunker in the back yard, I’ve decided to take my summer gardening from a few pots on the deck to a full-fledged vegetable garden; to exhume my grandmother’s “putting up” recipes; and to learn the basics for storing food in our home. I know how to grow vegetables, and I’m a moderately-confident canner, but when it comes to food storage, I don't have a clue. But I know who does. Chances are, you know someone too, if you have a Mormon friend. Many people have basement pantries and shelves of peaches, pickles, jellies and dilly beans, but I needed the information from the people who know how to survive off their food storage – for three months, six months or even a year. The go-to group for this are members of the Church of Jesus Christ of Latter Day Saints (LDS). I have two LDS friends and they have directed me to the clearest easy-to-follow instructions for starting out as a food-storer. Eating from Storage You need a room with a consistent climate (garages aren’t