April 2011

My immediate objective is 44.600, a Hidden Pivot noted here yesterday, but any higher would portend yet another burst of strength to the 45.240 target shown in the chart.  If it gives way easily -- or better yet, is exceeded on a closing basis -- I'd infer that a 48.040 target is in play.

A minor rally target at 1509.50 that was flagged here earlier remains valid and should be used as a minimum upside objective for today.  Any higher would indicate 1518.70,  while a two-day close above that last number would presumably put a much more important target at 1581.20 in play.

We were in and out of May 41 puts yesterday, dropping about $50 on four of them as we tested the water.  A chart of the puts suggests much lower prices ahead (see inset), which if true means that the underlying vehicle is headed significantly higher. SLV's  daily chart confirms that our 42.60 target "should have" shown some stopping power, and the fact that it did not tends to corroborate the grim prognosis for "don't" bettors foolish enough to acquire puts.  Now, a Hidden Pivot resistance at 43.32 is the first place where we might expect to see some stopping power.  You can try shorting there via four May 42 puts, but once again I'll suggest using a very tight stop-loss 8 to 10 cents below what you pay for the options.

Friday's low came within four ticks of a calculated low (see chart), so perhaps we should dogtail the Dow for a while as long as it's being so cooperative. The blue chip average looked bound for at least 12356 at the close yesterday, although that Hidden Pivot's dubious, sausage-y pedigree makes it unsuitable for shorting.

Here we go again. The futures are up 7.00 points early Wednesday morning, bullyragging and wheedling shorts yet again. There are no timely opportunities that I can discern at the moment -- unless, that is, you're inclined to look for camouflaged morsels on the three-minute chart. To keep this rally in perspective, let me mention that the pointless histrionics of the last two weeks have yet to take out a Hidden Pivot rally target at 1336.50 that has served us well.  While the high that was recorded within a few ticks of that number may not turn out to have been the Mother of All Bear Rally Tops, it is at least still a contender, in theory, after a relatively lengthy period of flouncing around.

Here’s an upbeat, dog-bites-man story concerning the neighboring town of Lafayette, Colorado, where a major piece of the retail economy has been on the skids for years. Wal-Mart and Albertson’s long ago vacated the city’s biggest mall, hollowing out two cavernous buildings and all but snuffing what little business had remained for the small shops and restaurants that once lined the plaza.  Although the city was hoping to redevelop the site with a mix of offices, residential and retail, when recession hit full-bore a couple of years ago commercial interest dried up.  Let’s skip ahead to the present: The site has just received a $22 million refurbishment; its huge, weed-sprouted parking lot has been repaved and a new, 4-acre lot added; the big-box stores have been joined under one roof, creating a 130,000-square-foot room; and, the facility has been drawing 10,000 visitors a week, many of whom are spending money at neighborhood restaurants and stores, although not at the “main attraction” itself. Can you guess what “business” this new operator is in?  Here’s another hint: millions of dollars went into the installation of stadium-sized video monitors, state-of-the-art sound and light equipment, and seating for 4,000.  If you guessed “concert hall,” you’re close, since the place really rocks on weekends.  But this operator is in the business, not of rock concerts, but of redemption, since it’s a house of prayer -- Flatiron Community Church (FCC), it’s called, with a congregation of 10,000 that is the second biggest in Colorado. And it is succeeding in such a big way that it has begun to revitalize a section of town that was commercially dead a year ago.  “Ten-thousand people have to buy gas, groceries and hamburgers somewhere," says Jim Burgen, the tattooed and energetic lead pastor of the non-denominational Christian church. Reluctant to

The peak of yesterday's wild swings hit 43.560, a nickel beneath our 43.610 target.  It remains valid, as does another Hidden Pivot at 44.600 that would be in play as a minimum upside projection if the lower number is breached by more than three ticks.  Alternatively, while a feint below 41.815 this morning wouldn't negate the rally target, it would create a bearish impulse leg of hourly degree that should be treated by bulls as a yellow flag.

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.