Tuesday, March 22, 2011

Rather than consolidating, Apple appears to be breaking down.  We'll be better able to tell once we've seen how the pattern shown in the chart plays out.  If the bull market is about to come roaring back, the corrective move should not exceed whatever 'p' support eventually forms.  A correction to 'd' would be permissible, but the implication would be that any subsequent C-D thrust could be the bull's last gasp.

A Hidden Pivot resistance at 108.53 can serve as our minimum upside objective for the moment (15-minute: A=98.25 on 3/16, B=105.18 on March 17). First, though, the futures will need to blast through the midpoint resistance at 105.07, which it has exceeded so far -- fleetingly -- by just 11 cents. Alternatively, it would take a print below 101.31 to turn the hourly chart mildly bearish.

We hold 400 shares with a costs basis of 50.40 and a 50.27 stop-loss. Today only, offer a round lot to close for 52.14, retaining the stop-loss for the 300 shares that would remain.  _______ UPDATE (11:08 a.m. EDT):  After exiting a round lot at 52.14 , we now hold 300 shares with a profit-adjusted cost basis of 49.82.  That implies a $900 paper profit at today's so far high.  Since the purpose of these occasional "easy-as-pie" trades offered by Rick's Picks is to allow even relative novices to recoup the cost of a year's subscription, we are most surely ahead of the game.  For now, tie the position to a 50.75 stop-loss.  Once this pup gets above March 9's 53.21 peak, we can let it ride.  _______ FURTHER UPDATE (10:39 a.m. EDT):  In the chat room just now, I have advised taking another partial profit, selling 100 more shares at a then-current price of around 54.64.  The theoretical gain of $482 will effectively reduce the cost basis of the 200 shares (or multiple thereof) we still hold to 47.41. ________ FURTHER UPDATE (March 30, 9:41 a.m. EDT):  In the chat room just now, with Newmont flailing wildy after a sleazy head-fake on the opening, I have recommended exiting another round lot at a current price of around 53.73.  Officially, I'll record 53.60 as the sale price, though, since the stock is still acting crazy.  This leaves us with a hundred shares whose effective cost basis is 41.22

Silver's encouraging rally fell 21.5 cents shy of creating a powerful, bullish impulse leg on the 480-minute chart. Buyers looked primed for a second shot today, however,  after pulling back only slightly from the intraday high at 36.290.  Our target on a decisive breakout above 36.505 is still 38.605. As of around 9:38 p.m., the best place to find camouflage for initiating a long position was on charts of five-minute degree or less.

Further scrutiny of the Dollar Index's chart divulges a new and compelling target at 75.44 that lies well beneath two more Hidden Pivots, closely spaced and just inches away, where I'd suggested looking for a bullish turn. The prospect of one remains strong, but in this instance, I am recommending as a precaution that you apply the "Chopped Liver Rule" to avoid getting steam-rollered by a downtrend stronger than we might have imagined.

Yesterday's weakness brought the Dollar Index down to within a hair of the 75.27 Hidden Pivot flagged here.  There is yet another slightly below it, at 75.18, and my expectation is still for a trend reversal from very near these levels.  Even so, the "Chopped Liver Rule" should be applied in assessing the strength of the downtrend. It states that because a Hidden Pivot is "not chopped liver," as the saying goes, we should always expect a discernible trend change when a trading vehicle hits one.  If there is in fact no visible change of direction, then we should infer that the existing trend is quite powerful -- powerful enough to make it appear as though the Hidden Pivot where we were expecting a trend reversal is not even there.  Thus, if 75.18 fails to hold, it would be a bearish sign going forward, and the next place we would look for a low is at 74.44, minimum (see chart).  Since odds of at least a minor trend change from current levels are pretty good, traders should be prepared to leverage bullish "camouflage" patterns aggressively (but with the usual tight stops) on the five-minute chart or lower.

I don't offer regular coverage of the Swissie, but a chat-room query has prompted me to take a look. Fortunately, there is a very clear, bullish pattern on the 480-minute chart that allows for a confident projection of another leg up. The relevant Hidden Pivot target is 1.1274, and it looks quite compelling. If there is any second-guessing to be done, it stems from the fact that the pennant consolidation that has occurred so far since last Thursday seems capable of propelling the futures at least somewhat higher than our target. Regardless, we should use 1.1274 as a minimum upside projection for now.  If trading from the long side, the most promising place to look for an entry opportunity would be near 1.0977, the Hidden Pivot midpoint associated with our target. _______ UPDATE: The futures bounced 116 ticks from within 0.0011 points of the midpoint pivot given above, so traders could have caught a nice ride with a fairly tight stop-loss.  If you jumped on this one and took a partial profit on the spike, use a stop at 1.0989 for what remains of the position, trailing a stop by 20 ticks if the futures pop above 1.1058.

The peak of yesterday's 25-point rally missed our 1296.75 target by just two ticks, but bears shouldn't be lulled into thinking that might be the end of it. In fact, after the by-now obligatory whoopee cushion leap in the opening minutes of a session, the futures flatlined for the remainder of the day in a shallow consolidation capapble of pushing them to at least 1317.00 on the next thrust. Night owls looking for a low-risk way to board may have to drill all the way down to the one-minute chart (see inset), since that's the first place I was able to find "external" peaks subtle enough for such purposes.

[With debt spinning wildly out of control and the States threatening to revolt against the tyranny of Washington, we asked some frequent contributors to the Rick’s Picks forum how they thought the nation would look five years from now.  In the essay below, Roger Erickson eschews predictions, asserting instead that we will all have to pull together to meet whatever challenges and disruptions the future might bring.  The task can only be accomplished, he says, if we rise above the squabbling of nation states, ideological factions and other vested interests. A model for this behavior, he notes, can be found in doctrines espoused by, among others, the United States Marine Corps. RA]  In what condition will our markets be in, say, five years?  According to the super computer DeepThought (and probably Larry Summers too), the answer is 42. But seriously, in five years, we'll either be back to investing in national Selection Markets, not just financial markets – or we'll have chaos.  How to do that would require a separate essay, so I'll just develop the premise for now.  If it's not obvious, here's an intro to “group selection.”  Individuals tend to forget that we currently survive as a social species divided into nation states. In this setting, group context provides full-spectrum group selection pressure, expressed through group goals/policies/strategies/tactics/outcomes. Sub-markets for tactical diversity, such as ideology or fiat finance, only serve one tiny aspect of the overall selection process – something we relearn whenever national security comes up. (In a previous comment here, one reader reminded us that we're toast if neighbors don't have our back.) Since group data are meaningless without group context, it follows that finance markets are meaningless without group goals and campaign strategies. That's no more mysterious than the dual strategies of Marines: get promoted to