Wednesday, April 27, 2011

A Hidden Pivot support at 43.775 remains valid as a minimum downside target, but the futures would be out of jeopardy if they can push above 47.950 today. That would be a pretty powerful thrust, but a lesser effort hitting 47.160 would at least put the bad guys on notice that their influence is waning.  Both of the bullish price objectives I've flagged are shown in the chart.

Gold has rebounded smartly without having quite achieved a minor downside target. This is bullish, but the short-term picture would become still moreso if the futures are able to push above the 1516.00 target of the minor rally pattern shown. Please note as well that a stall at 1512.70 would confirm the existence of a new rally target at 1533.40.

Not to disparage last week's powerful, bear-impaling 35-point rally, but it narrowly missed taking out an "external" peak at 356 that should have fallen if this latest bull cycle were destined for fabulous new highs. Now, even if the peak should succumb when the stock gets second wind, it will not negate the evidence that Apple no longer has the moxie that we've seen in the past.  The company nonetheless remains too profitable and innovative to diss, although this is probably a good time for long-term shareholders to initiate a program of covered writes if you are not doing so already.  For right now, I'd start with May 345 calls, which will somewhat favor defense over yield.

Yesterday's mechanical rally fell 1.75 points shy of the 1347.75 Hidden Pivot we've been using as a target, but because it surpassed mid-February's watershed high, creating a new impulse leg of daily-chart degree, the short-term implications are bullish.  Even so, I am raising the yellow flag as I'd said I would, since, at these heights, complacency is apt to be approaching an epochal peak.  Under the circumstances, the bear could surprise us by sauntering out of his den before the futures have achieved some 'D' rally target that has commandeered our attention. If so, you will see a downtrending a-b-c from that high that reaches or exceeds its 'd' target. The first instance where this could actually occur is shown on the accompanying chart, so night owls should pay very close attention to price action at the target.  If, on the other hand, the futures turn higher without having corrected to 'd', that would imply that the bullish status quo -- soon to enter its 27th month -- still obtains.