Tuesday, April 19, 2011

I've identified short- and intermediate-term targets as high as 1581.20, but for now let's use one at 1509.50 that has come into sharp focus as a minimum upside projection. The target is corroborated by a sharp pullback that came within five ticks of the pattern's 1477.30 midpoint. That was the last "easy" entry spot, but getting aboard at these levels with camouflage will likely require close attention to charts of five-minute degree or less.

We continue to hold 300 shares @ 42.01 against three June 40 puts acquired for 2.35.  In my eagerness to get newbies aboard yesterday, I advised no stop-loss on a 41.40 bid for 200 shares. Some of you who were in the chat room evidently bailed out when SLW plunged well below that number, but if any subscribers held on, even after I posted a recommendation in the chat room to exit as the stock was rebounding above 41.10, please let me know and I'll establish a tracking position if there are at least three affirmative responses. Since there is still vulnerability down to as low as 37.97, those who bought yesterday should use a 41.10 stop-loss.

A 1.4093 Hidden Pivot given here yesterday remains an unorthodox spot to try bottom-fishing with a very tight stop-loss. I've included a chart that shows the provenance of the target.  This interpretation was inspired mainly by my fetish for a sequence of single-bar coordinates here that is as unintuitively abc-like as tradable patterns come. _______ UPDATE (April 21, 10:53 a.m. EDT): Tracking the little sonofabitch diligently may be more trouble than it's worth, since the euro moves precisely to its targets when most people I know, including me, are sleeping.  It has just done so again, hitting a high this morning at 1.4631 that lies just 0.0006 points from the 'D' target of this in-your-face pattern on the hourly chart: A=1.4000, B=1.4500, and C=1.4137.

Yesterday's whacky action saw SLV spike to within a dime of our short offer.  I'd given a rally target at 42.68, but re-measuring the pattern has refined it to 42.60.  There are too many variables to provide a "safe" entry strategy Monday night for Tuesday, but I'll provide a speculative one nonetheless for anyone feeling bold:  Bid 1.26 four four May 41 puts, stop 1.12.

My choice of a point 'A' is arguable, but if it works, the futures should fall to at least 1276.25 before getting good traction. That's a Hidden Pivot support that can be bottom-fished with a stop-loss as tight as three ticks. The 1290.00 midpoint is worth little to us, however, since it lies just a tick from the obvious structural support of yesterday's v-shaped bottom.  Bears should give benighted buyers wide berth if the futures should turn higher from somewhere above 1290.00 and subsequently make it past 1311.50, the first 'external' peak a rally would encounter on the hourly chart.

We stand foursquare with the lunatic fringe on the "birther" question, and we commend Donald Trump for pursuing it like a pit bull.  It's pretty obvious he's onto something, even if Fox's Bill O'Reilly doesn't believe there's a story here.  However, we doubt O'Reilly has a glib rebuttal to the investigative piece posted at American Thinker.  Click here to access it.

And now we learn that Standard & Poor’s, the same unprincipled hacks whose grossly inflated triple-A ratings made America’s real estate boom and still-busting bust possible, has downgraded the USA itself.  Or to be more precise, their long-term outlook fell from “stable” to “negative” – a Kremlinesque way of hinting that an actual downgrade from AAA is possible if the U.S. doesn’t get its fiscal house in order (as though that were even possible, given that the Federal debt is $14.3 trillion and climbing, and that the economy is on a permanent respirator). And whose payroll is S&P on, we wonder?  Until yesterday, we thought they were so busy putting the screws to Europe’s financial cripples that there wasn’t time or manpower enough to pore over America’s books. Now, it would appear, they’ve found actual fiscal problems to worry about even if the real worries eupted like Vesuvius three years ago. And another thing: Whenever they slam the PIIGS by taking their credit ratings down a peg or two, it is usually to buoy the U.S. dollar that day so that Little Timmy Geithner’s pep talk at some Rotary Club luncheon gets good press. Whatever the reason for yesterday’s downgrade – about as shocking to millions of Americans as the revelation that Liberace was gay – it was fun to watch the bond market react. Or rather, to not react. T-Bond futures ended the day down a few measly ticks, although the obligatory swoon on the “news” allowed predators who live off such volatility to shake down the rubes. The June contract plummeted more than a point-and-a-quarter on the opening bar, then spent the rest of the day making fools of those who had bailed out at the lows. Nice to see the bonds acting conflicted for a change. On