Friday, September 9, 2011

It wouldn't take much for the Dollar Index to signal the beginning of an extended bull move.  Today's DXY tout includes a chart that shows exactly what it would take, so I'd suggest having a look and setting a screen alert if you want to be prepared.

The Dollar Index has gone impulsively bullish on the intraday charts, but we should raise the bar a bit higher to keep our emotions in check.  Specifically, let's stipulate that DXY must pop above the external peak at 77.38 before we infer that something interesting is happening. If it happens in an uncorrected  lunge that also exceeds peak #1, we could be fairly certain that were are witnessing a powerful breakout -- the beginning of a rally that could last for months, if not longer.

Once again, I'll suggest tightly stopped bidding for four contracts -- or a camouflage-style buy-stop -- down near 738.25, a still-promising Hidden Pivot support. Officially, we'll use the latter tactic, since it promises to be less risky. ________ UPDATE (10:40 a.m.):  The little egg-sucker has uncorked a $2500-per-contract rally so far this morning after bottoming two ticks above the correction target where we were trying to get long.  I'll score it officially as "nothing done," however, since even on the one-minute chart there were no camouflage patterns to leverage.  The good news is that, barring Armageddon, it is 100% certain there will be other opportunities.  For now, we'll just hang loose while we get to know the little weasel better.

Bulls and bears went toe-to-toe Thursday night, each pretending to see meaning in President Obama's jobs speech.  Whatever the result of this flyweight slugfest, trying to predict any further out than, oh, 15 minutes seems like an exercise in futility, so I won't try. If the irrationally-but-barely-exuberant carry the day, look for a continuation toward the 1233.00 target given here earlier. ______ UPDATE (11:37 a.m. EDT):  Bears have carried the day, injecting a dose of righteousness (and reality) into Wall Street's otherwise sordid existence.  The futures are down 23 points at the moment, perhaps headed for a bounce at 1157.50, a Hidden Pivot midpoint tied to a 'D' target at 1111.25.

The  rally died well shy of the 42.645 midpoint pivot shown, but assuming it is surmounted today, the futures should be presumed bound for at least 43.190, its 'D' sibling. A nagging concern, however -- one that could dampen buying for the next several days -- is the narrow failure of yesterday's thrust to exceed an obvious external peak on the lesser charts at 42.735.  Another penny-and-a-half would have done the trick, but the fact that buyers chickened out is not encouraging.  Night owls can nevertheless try bottom-fishing with a 'camo' bid tied to the midpoint support shown at 41.255.

Bulls did what we'd asked of them yesterday, blowing past a minor external peak, but the futures were having trouble sustaining altitude in after-hours trading. More specifically, they were chopping erratically lower shortly after 9 p.m. EDT after a failed attempt to consolidate above the 1869.40 midpoint pivot shown. Its 'D' sibling lies at 1889.50, a Hidden Pivot that would become our minimum upside objective for the very near-term if and when the December contract overwhelms the midpoint. Most immediately, however, the 5-minute chart was impulsively bearish, even if the selling was not very convincing.

[ Wayne Razzi's  guest commentary drew quite a response, so I am running it for a second day. I'll have something to say about the President's latest jobs proposal when Shadowstats reports that U.S. unemployment has fallen below 20 percent.]  Parents have many responsibilities and as nothing matters more to me than the wellbeing of my four children, I take my fatherly responsibilities very seriously.  Educating and guiding my children are two of the most important of those as I see it, and yet my confidence in addressing these responsibilities is decidedly losing a battle to anxiety. John 8:32 accounts that “…the truth will set you free.”  And it seems that it does most certainly achieve that, even in small doses, but it doesn’t assure that you that you’ll find a better place as a result, which is exactly where I am at present.  Aside from the birds and bees and related topics, I never anticipated that I’d have to hesitate so frequently when answering the questions put to me by my children, who range in age from 7 to 12. However, there isn’t a day in which I do not have to either frame my responses quite craftily, or quite honestly tell them that I’ll properly answer a particular question when they are older.  The frequency at which this is occurring is increasing significantly and that is what led to me thinking about just how pervasive the dystopian matrix has become.  I suppose the real problem lies with me in refusing to deceive my children by offering up pat answers to them. Here a few anecdotes.  The smart bunch that y’all are, I expect that you’ll need nothing beyond these to see my point.  Each question is followed partly by some of what I said and some of what I thought.