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From the monthly archives:
May 2011
A pop above 39.565 is still needed to rejuvenate the intraday charts, but we’d settle for a mere 36.930 by tomorrow to start the ball rolling again for bulls That’s a tick above the look-to-the-left peak shown in the chart, but if the futures cannot muster the energy to get there, a 31.205 downside target broached here earlier — the Hidden Pivot midpoint of an even larger corrective pattern — will remain as a minimum bearish objective. More immediately, the July contract was looking a little tired Sunday night. But if the mood changes dramatically enough to push the futures above a midpoint resistance at 36.415, a ‘D’ target at 38.275 would be in play.
A 1470.10 minimum correction target that lies 7.50 beneath last week’s low remains in force, but if it’s exceeded on a closing basis or by more than 1.50 points intraday, brace for more downside to its Hidden Pivot sibling, 1413.50. Alternatively, it would take an upthrust exceeding 1529.30 to produce a glimmer of light for bulls, and nothing less than 1543.60 to turn the hourly chart bullish. Both price points are highlighted in the chart.
Although today’s E-Mini S&P forecast predicts lower prices, a cursory look at the Dow’s hourly chart obliges us to give the begrudging benefit of the doubt to bulls, since almost no technical damage has resulted from the scuddling price action of the last two weeks. Bulls would regain control on a thrust today exceeding 12810, but otherwise we should presume the correction has at least a little ways to go, to a minimum 12461, or possibly to 12427 if any lower.
The June contract would need to close above the 1.2543 midpoint of the pattern shown to resume the bull move begun in late April from 1.2074. More immediately, the minor trend is bearish and projects to the 1.2265 target shown.
Despite the E-Mini’s mindless, flea-bitten histrionics of the last two days, we remain short a single contract from 1363.00, stop 1358.25. My minimum downside target for the minor cycle is 1310.0, but my intention is to implement a trailing stop only after the position has gone 100 points in-the-black. If you hold more than a single contract, however, I would strongly suggest taking profits near 1310.00 so that only a third of your original position remains.
I’ve written here before about the unsustainability of soaring college tuitions for degrees of increasingly dubious value. I’ve also predicted that all colleges will eventually wholesale degrees online, with upscale, brand-name sheepskins from the likes of Harvard, Princeton, Stanford and Yale going for around $10,000 in today’s dollars. At the same time, schools like University of Phoenix that impart professionally useful skills to students will continue to flourish, notwithstanding the sleazy, hypocritical efforts of the college establishment to suppress competition by monoplizing accreditation standards and procedures. For an interesting take on this subject, click here for America’s College Bubble Next to Burst.
The implications of today’s tout for the June Ten-Year T-Note are far too important to ignore. I’d strongly recommend checking it out, since the chart I’ve included could provide us with a very precise handle on an impending sea change in the financial markets.
The bullish pattern shown in the chart, gem-like in quality, was discovered during a recent impromptu webinar. Although the debate concerning the direction of Treasury yields has gotten quite intense, this chart will allow us to remain confidently above the fray; for it yields an unmistakable, long-term target at 123^21 that says the bull run from February’s abysmal lows is near an end. Someone mentioned that Sinclair was already short the Bonds, and although this would be just a tad premature relative to my target, it is not unwarranted — especially given the possibility that the rally will end without having achieved the target. If this were to occur now, by way of a dip beneath the 121^17 low recorded on May 6, it could signal the possible start of a bear market. Shorts from 123^21 are suggested with a stop-loss of at least five ticks, but you can widen it to suit your style. ______ UPDATE (May 19): The futures have gotten as high as 123^05 — close enough to the target that we should be alert to the possibility that a potentially world-shaking top is in.
Why We Think Dollar Bulls Are Premature
by Rick Ackerman on May 17, 2011 12:01 am GMT · 26 comments
Although some chartists we respect have recently turned bullish on the dollar, count us among the skeptics. Technically speaking, and based on our proprietary indicators, there are two specific reasons for this. The first is on display in the 240-minute bar chart of the NYBOT Dollar Index shown below. Notice the strong upthrust that began on May 5 from a low of 72.70. We’d be the first to concede it looks like a real barn-burner — provided the steep pitch of the rally is considered and nothing else. However, a trend’s steepness is of little concern to those who use the Hidden Pivot Method – the same method that Rick’s Picks has honed and taught to hundreds of traders over the years. For it is not the angle of an uptrend or downtrend that tells us how strong it is, but rather the number of prior peaks or lows that the initial thrust, or “impulse leg,” exceeds without pausing for breath. In this instance, and as you can see, buyers have hesitated just below each of several such peaks, pulling back from each in order to get a running start. Long experience tell us that this is not how the Dollar Index should be acting if buyers are indeed gearing up to launch a major offensive or perhaps even a new bull market. Instead, each new thrust should effortlessly skewer peaks to the left of it. Moreover, fledgling trends with sufficient power to reverse a long-term trend tend to surpass two, three or more such peaks with their first “impulsive” thrust. » Read the full article