Monday, October 3, 2011

Use the 31.905 midpoint resistance shown in the chart as a bullish tripwire, since buyers will need to push this vehicle above it to start fulfilling the promise of the  $5+ impulse leg begun from last Wednesday's one-off low at 27.965.  If the pivot is exceeded on a closing basis or by more than three cents intraday, I'd infer that more upside to at least 34.715, the midpoint pivot's 'd' sibling, is imminent.

A so-far $27 rally Sunday night is happening at the wrong time of day to be worthy of our trust, but we'll give it the benefit of the doubt nonetheless if it can rise a further 9.80 to surpass an external peak at 1659.00 (see inset) that was recorded last Wednesday on the way down.  There are no impulse legs on the hourly chart that would help us identify a closer or subtler benchmark; nor, with this rally under way, is there much in the way of a handhold for a 'camo' entry. The best I can offer shortly before 3 a.m. EDT is the minor-cycle rally target at 1652.40 shown in the chart.  If it is easily exceeded, bulls can take encouragement.

Two compelling trends, both of them nicely visible on the 240-minute chart (see inset), imply that DXY is bound for a minimum 80.10 once it surpasses a lesser 'D' target at 79.17.  So far, the index has stalled within two ticks of that number, a Hidden Pivot midpoint resistance, but once above it the run-up to 80.10 would become an odds-on bet.  Lest we be caught without an even more ambitious target if buyers should run amok, here it is: 81.49 (A=74.68, B=78.86, C=77.31). At that point, the dollar will have rallied 12% from its early-May lows, but it would need to reach 87.50 for the 20 percenter that would qualify as a bull market.

Having recently caught the low of a very tradable, 35-cent bounce within a penny, we have little to fear if Corn continues to do its nasty worst. I still like the bullish story concerning an imminent surge in demand from China, notwithstanding Friday's news that stockpiles were nearly a quarter higher than had been estimated just three weeks ago. Does anyone smell a USDA rat?  Anyway, since we can get long at will anywhere we please, and do so using Hidden Pivots that will help reduce our risk or even allow a profit if we're wrong, I'll continue to call the turns at each promising opportunity. For now, I'll suggest that less experienced traders simply back away, since the futures, having exceeded a clear Hidden Pivot support at 606.00 that comes from the intraday charts, appear bound for a test of  early July's 589.25 low.  If you are confident of your camouflage skills, however, try getting long by buy-stopping the first point X entry that occurs on the 5-minute chart after 589.25 has been exceeded to the downside. ______ UPDATE (1:03 p.m. EDT): Following an overnight low at 586.00, entry as suggested above would have come at 601.75, triggered at 11:05 a.m.  The pattern that provided the entry signal is razor-sharp on the five-minute chart, with single-bar ABC coordinates at, respectively, 590.75, 606.50 and 597.75. For your further guidance, I am establishing a tracking position as follows: long one contract with a cost basis of  587.00.  This implies that four contracts were bought initially, with half of them exited profitably at the 605.75 'p' midpoint of the camouflage pattern, and two more at 613.50, the 'D' target.  For now, stop yourself out if a bearish impulse leg is created on the 10-minute chart.  That implies a print down at  590.50, but the number will change if the futures

Because there are so many downtrending ABC patterns from which we can derive targets, I've emphasized one that generated a relatively large bounce from within a tick of its 'p' midpoint, 1133.75.  The bearish D target that corresponds to that number lies at 1077.50, and so that Hidden Pivot would become our minimum downside objective if the futures were to close beneath the higher number or exceed it intraday by more than a point or so.  More immediately, the futures are down 8.25 points and bears should therefore beware, since the dirtballs who control this game are notorious for fading the dumb money on Sunday nights.

Two weeks of protests on Wall Street have spawned sympathetic demonstrations across the U.S., but it’s too early to say whether a full-fledged political movement with charismatic leadership will emerge.  While demonstrators have noticeably lacked the passion and focus of 1960s campus radicals, we shouldn’t rule out the possibility that today’s somewhat angry crowds will tomorrow make up for their docility with tenacious sticking power. For the time being, though, the objects of their ire are so nebulous that the demonstrators might as well be targeting food additives or the juicing of baseballs to get attention. “The one thing we have in common is that We Are the 99% that will no longer tolerate the greed and corruption of the 1%,” reads the wishy-washy manifesto of, for one, Seattle activists.  Let’s hope, however, that if mere intolerance of greed and corruption eventually turns into anger, as it well may, that the torch mobs will be able to distinguish the scoundrels who run the banking system from all of us small-businessmen and entrepreneurs whom Mr. Obama would designate as “rich” simply because we have lounge privileges at the nation’s airports. Perhaps the protestors would be surprised to learn that many of the traders and market-watchers who weigh in regularly at the Rick’s Picks forum explicitly agree that greed and corruption have claimed America's very soul. Far be it from us, however, to discourage activists with the cynical observation, oft voiced in the forum, that things have decayed beyond reform or redemption. To borrow a famous line from the Vietnam era, though, it may be necessary to destroy the village to save it. When Crowds Disperse… Whatever strategy evolves on the streets, the protestors have shown admirable restraint so far, having done no worse than tie up Brooklyn Bridge traffic for a few hours on a