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.
From the monthly archives:
April 2011
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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.
The futures have bottomed Sunday precisely two ticks from where they ought to have (see chart), so traders should come to the task with a cautiously bullish bias. Seekers of camouflage should try the five-minute chart, which as of around 1:10 a.m. Sunday was creating untradable, ‘dueling’ impulse legs. There was nonetheless a more speculative opportunity in prospect if the futures were to fall to 1.4342 – a minor midpoint support — without having exceeded 1.4369 (aka ‘c’) to the upside first. _______ UPDATE (8:47 a.m. EDT): The futures have breached Hidden Pivot support overnight and appear headed toward the conventional, “structural” support afforded by the 1.4222 low recorded on April 7. _______ FURTHER UPDATE (1:47 p.m. EDT): The June Euro has been the slave of Hidden Pivots lately days, having taken another leg down to within a single tick of the ‘d’ of this pattern (30m): A=1.4482 (April 15, 3:30 a.m.); B=1.4280, C=1.4338. If the futures should fall anew, try bottom-fishing at 1.4093 (A=1.4482, B=1.4243, etcetera…) with a very tight stop-loss.
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The rally pattern shown in the chart suggests a stumble at or very near 42.68. Let’s try to get short there, buying four May 41 puts if and when the underlying vehicle gets within 5-8 cents of the target. If the stock tops where expected and comes down hard enough to allow you to sell the puts for 40 cents more than you’ve paid, close out two of them. Since there’s a chance that the stock will hit 43.32 if it blows past the first pivot, plan on buying four additional puts at that level. _______ UPDATE (11:35 a.m. EDT): A rally spike in the opening minutes of the session carried to 42.50 — not quite high enough to get us short. The order is still valid, but, for your information, there was no easy way, even drilling down to the two-minute chart in search of camouflage, to get short.
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Standard & Poor’s Hacks Downgrade…America!
by Rick Ackerman on April 19, 2011 3:57 am GMT · 39 comments
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 the one hand, USA Inc. took one small step toward its inevitable bankruptcy. On the other, the weak economic outlook prevented bonds from sinking on inversely rising yields. Doubtless, those who bought did so with a quick-exit strategy in mind.
Gold, Silver Swoon Too
The quasi-criminal shakedown wasn’t limited to the Bond pits either. Gold and Silver both took a flying dive for no particular reason – other, perhaps, than a fleeting lack of demand as traders tried to figure out what it all meant. The answer to that question being “nothing,” bullion quotes soon recovered even more sharply than Treasury debt when it was realized that Standard & Poor’s tasteless publicity stunt had laid an egg. For our part, we held an existing position in Silver Wheaton over the four hours that it took for the hysteria to run its course. Although the stock swung more than $4 yesterday to close down $1, we’re not convinced that silver bulls are out of the woods. Actually, we’d been looking to short silver ETFs on the opening, and although the rally spike on the opening bar missed our offer by pennies, we might be tempted to try again on Tuesday. On the bullish side, June Gold still has a ways to go before it bumps into any Hidden Pivots that look capable of briefly reversing the tide. If you’re interested in our precise targets for Comex Gold (and Silver) but don’t subscribe to Rick’s Picks, try a risk-free seven-day trial by clicking here.
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