Wednesday, September 21, 2011

Several of today's touts are actionable, albeit geared to the constipated action that has characterized the ups and downs of Gold, Silver and shares in recent weeks. As today's commentary notes, traders appear to be marking time after having discounted, not epic disaster, but a best-case Greek default that spares the rest of Europe, at least for the moment.

Google got within pitching-wedge distance yesterday of the 562.27 rally target shown in the chart. Now, if the stock gets second wind and pushes back up to our number or somewhere very close to it, we should try to get short using camouflage. Specifically, I'll recommend shorting 200 shares at the first downtrending 'X' of minor degree after the target is approached within, say, 60 cents.  You could also try something easier but somewhat more risky, offering 200 shares short at 562.19, stop 562.41.  ______ UPDATE: We'll put this one aside for now following yesterday's plunge to 538.

A downside target at 38.400 remains my minimum objective for the near term, but a lesser Hidden Pivot support at 38.760 can be used for bottom-fishing with the tightest of stops. Specifically, I'll recommend bidding 38.765 for a single contract, stop 38.745.  If the order fills and goes in-the-black, you'll be on your own.  Please note, however, that the four ticks of theoretical risk at entry imply that we'll need a rally of at least three times that, or twelve ticks, before we could think about taking a profit or implementing a trailing stop for a potentially longer ride. _______ UPDATE (Thursday, 12:04 p.m. EDT): The futures are plummeting today, having touched a so-far low of 36.405. For now, use 35.700 as a minimum downside objective. That is the 'p' midpoint support of the large pattern, on the daily chart, A=49.540 (April 28), B= 32.350 (May 12) and C=44.295 (August 23).  A two-day close beneath the midpoint would have very bearish implications, since its 'd' sibling lies at...27.105.  Regarding the bottom-fishing trade, the futures fell too steeply to trigger it.

A downside target at 1750.10 is ebbing in importance, although the bearish, 1709.20 Hidden Pivot support of a larger pattern is still in play. Once again, a prior peak at 1840.10 is the number bulls must beat if they are to turn this vehicle around. A more ambitious benchmark lies at 1873.90.  That's the Hidden Pivot midpoint of the big pattern shown, and its breach on a closing basis would put the futures well on course for a romp to 1982.30, its 'D' sibling.

Night owls looking for a low-risk trade might be reduced to playing the right-hand margin of the 15-minute charrrrrrrrrrrt (see inset) if they are ready to jump on the futures when this tout is published momentarily. The impulse leg is subtle and perforce legitimate, but it will be gone if the rally exceeds 1999.50.  Your best bet five minutes ago was to buy the 'd' target of the pattern, but as 'c' has migrated higher, the odds have changed.  The bigger picture unfortunately is not worth examining.

Ahhh, it’s those old Greek worries again!  Yesterday they were blamed for undoing a nearly 150-point rally in the Dow, although the question of what had caused the rally to begin with seemed of less concern. We’ll proffer the usual, technical explanation: Yesterday’s ups and downs were caused entirely by algorithm-driven machines with nothing more on their tiny digital brains than a bunch of zeroes and ones.  And if they had a smattering of human help, the humans undoubtedly applied the same tried-and-true tactic that has carried the day for the hedgies time and again in recent months – i.e., letting the index futures fall on thin volume, exhausting sellers overnight; then inducing a short-covering panic ahead of the opening bell. Would that Greece were driven by algorithms and polymath dervishes!  Granted, this wicked combination could send millions of Greeks into manic-depressive fits and potentially suicidal lows. But, oh, just think about those highs -- just like the ones we thrill to nearly every week on Wall Street, where even the glowering menace of a Second Great Depression evidently cannot kill the insensate ardor of buyers.  So, if 300-point Dow rallies are still possible, why hasn’t the same kind of exuberance seized the proletarian mind in Athens?  The answer, of course, is that Greece’s mood is driven not by “technical factors,” but by the grim realities of a failing economy and an economic future utterly bereft of hope.  Greek businesses cannot get bank loans to tide things over while their customers try to scrounge enough cash to redeem their IOUs. This has by now developed into a vicious cycle that can only spiral outward until it has encompassed all economic activity. In the meantime, a Europe desperate to save the euro and a transnational political confederation that had been dreamt about by