Wednesday, March 30, 2011

A move just one tick above yesterday's high would create a bullish impulse leg on the hourly chart.  While that wouldn't be very significant by itself, it could energize a much larger, bullish pattern with the potential to push the buck to a Hidden Pivot at 1.0380; or thence, possibly, to 1.0799.

We are looking to buy 400 shares, but only on perfect terms. Yesterday our 41.96 bid fell 11 cents shy of the actual low from which SLW took a strong bounce.  Today we'll try bidding again at 42.51, three cents above a promising Hidden Pivot support at 42.48. A 12-cent-stop-loss is suggested. _______ UPDATE (1:38 p.m EDT): We'll continue to use stink bids in this stock, since I don't trust the rally.  Although buyers of precious-metal shares are ostensibly the good guys, the way they have been manipulating SLW in particular has been viciously predatory.  Gap-up and gap-down openings are occurring on most days, and buyers who have been suckered by the former will eventually dry up, allowing the stock to experience genuine weakness at the bell that will properly set the tone for the entire session. _______ FURTHER UPDATE (1:54 p.m. EDT): I'm establishing a tracking position of 400 shares, since two subscribers reported fills at 42.50 that held using a slightly wider stop-loss than I'd advised. The actual low was 42.27, and SLW has rebounded smartly since, touching 43.17.  A further push above 43.64 today would leave the bulls in good position to go marauding next week.

Bulls were giving up hard-won ground Tuesday night, but we should take encouragement nonetheless from the fact that the finishing stroke to yesterday's rally exceeded the 37.100 midpoint of the pattern shown.  A further rally to 37.350 is implied, although caution is warranted at the moment because the lesser charts suggest bulls and bears may skirmish overnight before the former can regain control. Night owls can try bottom-fishing at 36.915, a Hidden Pivot that can be found on the one-minute chart (A=37.170, B=37.020, C=37.065).  _____ UPDATE (10:52 p.m. EDT):  A four-tick stop-loss would have gotten you aboard, since the low so far tonight has been 36.900.  Use a 36.935 stop-loss for now, switching to a trailing stop that suits your style if and when 37.100 is exceeded to the upside. The Hidden Pivot at 37.350 noted above can be used for a minimum target if the rally catches fire.  FURTHER UPDATE (1:50 a.m. EDT):  The futures have rocketed to within a penny of the target, so at least half the position should have been exited for a substantial gain.  For purposes of determining a trailing stop for what remains, use a 38.605 rally target, since that's the next important stop on the way to Valhalla. FURTHER UPDATE (2:08 a.m): Based on a so-far high, as of the moment, at 37.390, you could use a trailing stop as wide as 40 cents.  If you initiated the original trade on a single contract, stop yourself out if a bearish impulse leg forms on the one-minute chart. At the moment, that would imply a drop to 37.250.

Gold's next big push should be good for a gain of at least $60, to just under $1,500, but the futures look like they're in no hurry to get airborne.  At the moment, actually, they appear vulnerable to weakness that could reach 1397.00 if sellers step up the pace. Their aggressiveness would be telegraphed by a decisive penetration of the 1411.00 midpoint associated with 1397.00.  This last number is a Hidden Pivot that can be bottom-fished via camouflage or with a 1397.20 bid, stop 1396.40.

I am opening this morning's tutorial session to all paying subscribers in order to take advantage -- in real time -- of a possible top in the broad averages.  As today's E-Mini S&P touts notes, there's a cluster of Hidden Pivots not far above that could show tradable stopping power.  The session will begin at 11 a.m. EDT and can be accessed by clicking here a few minutes before the start time.

Technical considerations aside, the Indoos look like they are getting ready to blast off for the relatively short thrust it would take to achieve new recovery highs and extend the Mother of All Bear Rallies into its 26th month.  Looking at the chart, the impending "liftoff" is so palpable, in fact, that we should view it with every ounce of contrarian skepticism we possess.  Practically speaking, this means we'll be looking to get short -- via camouflage, if possible -- at any Hidden Pivot worthy of the name. Stay tuned!

[The commentary that follows elicited a deluge of fascinating responses, and so I am letting it run for a second day.  Frequent contributors to the Rick's Picks forum were asked where the U.S. economy would be in five years. Below, Mario Cavolo, an expatriate whose business is based in Shanghai, says Chinese wealth is clamoring for bargains in the U.S. and that a falling dollar will bring enormous Asian investment to our shores, infusing the U.S. economy with new vitality.  The bad news is that large swaths of the American middle class will be devastated by the shifting economic landscape, unable to take advantage of the opportunities that voracious demand from foreigners will create. RA] On treating the theme Rick put forth for this recent series of contributing articles, it would be best to start with the fascinating and accurate point he makes that the “jig is already up,” as opposed to being a situation we think we are still attempting to put off.  There are far too many complex pieces to the puzzle across not only America but the entire global markets, so intricately interconnected, making it foolhardy to suggest their status or direction. I would suggest we can agree on a few core points giving us a sense of where we will be in five years and with that in mind, let’s say we have some very good news and some very bad news. No matter how many points we cover, there will be dozens of other points and counterpoints not touched, requiring a 600-page book to cover it all respectably. Yet, with regard to the core points put forth in this treatment, each of us needs to consider what possible moves, what choices, what adjustments he or she might make looking forward to their future from today -- not as being a