The hourly chart suggests neither particular strength nor weakness in the weeks ahead. However, given the range the euro could traverse and still be within the confines of the last few months’ price action, there is ample room to stoke the rumor mill as it pertains to Europe’s inevitable financial decline and fall. The currency got a reprieve last week when Germany eased somewhat on bailout terms for Greece, but no one could actually believe that this will prove to be more than a stopgap. Such considerations will tend to limit upside on the euro, but it will also temper the aggressiveness of euro bears, since an actual collapse, inevitable though it may be, has been forestalled yet again.
From the monthly archives:
June 2011
Friday’s $15 spike early in the session appeared to be in consolidation for a second-wind burst to as high as 1554.50 over the near term. (It would be subject to midpoint interference at exactly 1544.60.) It will take a little better than that, however — a print at 1545.60, to be exact — to refresh the short-term bull by exceeding yet another ‘external’ peak on the hourly chart. Night owls look for a low-risk boarding opportunity should seek camouflage on the five-minute chart, since that’s where ‘buy’ signals were being generated on Friday afternoon.
All of last week’s gratuitous ups and downs occurred beneath Monday’s peaks, suggesting buyers are in no great rush to forge higher. That said, there was a bullish pattern on the five-minute chart that projected to 36.475 over the very term — a 57-cent rally above Friday’s settlement. The midpoint resistance associated with that number lies at 35.980, so any upside breach of more than 2-3 ticks will be a positive sign; moreover, a move to the target would re-energize the bull trend on the lesser intraday charts, although not quite on the hourly.
Price action at week’s end was moderately bullish for the near term, since the pullback that followed an impulsive upthrust was not sufficient to create an offsetting, bearish leg on the hourly chart. Even so, the follow-through so far has been feeble, and the futures will need to push above 1271.00, a Hidden Pivot midpoint shown in the chart, to seize the advantage. Night owls may need to zoom down to the three- or five-minute chart to catch a ride, but there could also be a second opportunity if the futures pull back after slightly breaching the 1279.75 ‘look-to-the-left’ peak shown. _______ UPDATE (1:59 a.m.): DaBoyz have manipulated the futures eight points lower in an attempt to exhaust sellers ahead of Monday’s opening. At the moment, there are no downside pivots as compelling as the conventional structural support at 1252.25 created by last week’s low, but if it breaks down and the selling turns nasty, look for more weakness down to at least 1242.50. Day traders can bottom-fish that Hidden Pivot support with a stop-loss as tight as three ticks.
Google probably has a further six percent to fall before it will have a chance to find traction, since the minimum downside target implied on the daily chart is 469.54 (see inset). The midpoint sibling of that number is 507.63, so any rally to that number should be used as an opportunity to get short (although Tuesday’s thrust to 506.99 may have been it.) If the target doesn’t contain the selling, the stock would be facing more possible downside to 434.98, the target of another pattern on the daily chart. What makes the bearish case so compelling here is that neither of two important ’B’ coordinates was ’sausage’.
We usually use the Hidden Pivot targets of larger patterns to set up ‘camouflage’ trades on charts of lesser degree. In this case, however, in July Corn there is a compelling trendline that might better serve our purposes. It implies a test of support at exactly 687-5/8 if it happens today (i.e., Monday), and so I’ll suggest looking for a tradable turn there, and catching a ride northbound on the first ABCD pattern that subsequently develops. Because the trendline is so obvious, we should expect at least a small feint below the support before the futures turn around, so plan accordingly. And if you do get aboard, be sure to take a partial profit on half the position if ‘p’ is reached, since a breach of the trendline could turn out to be the bearish real McCoy. ______ UPDATE (June 21, 3:45 a.m. EDT): The support has migrated up the trendline to 388 today, implying the opportunity touted above still holds, albeit at the new number.
Silver continues to mark time, although my short-term bias is mildly negative because of the narrow failure of Wednesday’s rally to take out a peak made two days earlier at 35.995. It would still take a thrust above the peak to the left of it, at 36.350, to re-energize buyers. Keep 25.130 in mind as a worst case low for the summer if the July contract should close beneath 32.300 for two consecutive days. Those numbers are, respectively, the ‘D’ target and ‘p’ midpoint of the hourly chart pattern A=47.375 (may 2), B=33.035 (May 6), and both have been prominently featured here before.
It was strictly dullsville at around 2 a.m. EDT, but if my high-confidence, bearish target for bellwether Google is going to be achieved, then the broad averages are about to come in for some heavy selling. Check out GOOG’s chart if you want to see what may lie in store for the world’s premier web-based company.
Dueling impulse legs from Wednesday predicted yesterday’s dirge, but you can look for a pop today to at least 1541.80 if buyers resolve to budge this thing. The somewhat unintuitive pattern is shown in the chart. Camouflageurs may need to burrow all the way down to the 1-minute chart to find an entry spot, since it has already been signaled on the larger pattern. _______ UPDATE (11:32 a.m. EDT): The futures have rallied so far to 1543.00, coming within two ticks on an alternative target that uses the 1511.40 lowermost ‘A’ available on the hourly chart. There should be a stall here, but if not, the futures will be announcing that they’re ready to take on an hourly peak at 1555.00 recorded June 6 that has stymied bulls since.
Yesterday’s constipated price action brought the futures slightly closer to a key low at 1237.50 recorded on March 17. A test of support there still seems likely, but please note that an upthrust today exceeding 1288.50 would probably leave bulls in charge when the new week begins Sunday evening. Night owls looking for a lift can try to camouflage their way aboard via a pullback from a tick or two above 1275.75. This set-up is shown hypothetically in the inset. _______ UPDATE (11:16 a.m. EDT): An impulse leg whose strength is poorly concealed has left us with two tradable options: 1) use the camouflage of the very lesser charts to enter on a smaller pattern; 2) wait for ‘everyone’ to get stopped out on a dip below ‘c’, then enter on the second signal. The entry trigger at 1272.00 has not yet been tripped, but it’s very close.
