Thursday, October 20, 2011

A particularly slow day in a seemingly interminable stretch of slow weeks allowed us to focus on some subtle technical points that might otherwise have gone unremarked. On the technical premise of a strong dollar, we scrutinized the euro’s charts, which paradoxically looked strong but which on further inspection revealed some small but possibly significant signs of weakness. We then shifted our attention to the E-Mini S&P charts, turning them inside out to ferret out a tradable nuance. So that you can share in the suspense we felt poring over the charts, I’ll leave the outcome undivulged.

I've avoided sugar-coating today's touts for Gold and Silver, since I wanted to acknowledge Doug 'Harry' McLagan's early assessment that a nasty finishing stroke to the bear cycle begun in late September seems likely before bulls can return to good health.

The 240-minute chart shows Silver from the same, sobering perspective as the chart accompanying today's gold tout. Notice, however, that there is no middling point 'A' here, only the one all the way up at 40.780.  It implies that the gentlest climax we could hope for to the month-long correction would be down at 26.27, the midpoint pivot of the pattern shown. The 'D' target with which it is associated is a hair-raising 18.955, but we needn't be overly concerned unless the midpoint gets smashed.

The sideways move since late September is growing visually heavier and more weary each day, shortening the odds of a fall to at least 1585.30.  That's the Hidden Pivot midpoint of the pattern shown, and bulls should perhaps be resigned to seeing it revisited, since that's what it could take to shake the malaise that has held bullion in stays for so long.

Although I was  jazzed about the prospect of shorting a 447 rally target, the plunge on yesterday's faintly disappointing earning news has brought some downside targets into focus that we might try bottom-fishing just as easily. The clear 'p' midpoint and 'd' target of the pattern shown lie, respectively, at 395.23 and 382.05, and you can bid for 200 shares a few cents above either price, using a 21-cent stop-loss. That's how we'll treat this play officially, but I'll recommend a 'camouflage' entry on the five-minute chart if you're capable of handling it.  It'll be very interesting to see how this correction evolves, since at no time during Steve Jobs' tenure did any vicious move to the downside turn out to have been other than a shakedown engineered by DaSleazeballs for the purpose of buying stock at fire-sale prices. _______ UPDATE: The higher target got exceeded by $1, stopping us out for a modest loss of about $50.  We've still got one gambit left at 382.05, a HIdden Pivot that can serve for the time being as a minimum downside objective. _______ FURTHER UPDATE: We'll set the trade aside for now, since recent price action has distorted our target pattern.

We took a close look at this vehicle during yesterday's tutorial session, applying 20-20 hindsight to the task of uncovering a trading opportunity, any trading opportunity. Just such a one materialized in the wee hours Tuesday, shortly after the futures bottomed to initiate the buying spree that was to occur later in the day. But even in retrospect, the optimal entry point was not easy to find, nor did the first such opportunity produce the effortless cruise to Tuesday's top that we would have been seeking.  We'll use the magnifying glass again during Thursday's Hidden Pivot demo at 9 a.m. EDT (click here to reserve a front row seat), but I'd be lying if I said there's a trade you can try Wednesday night that is guaranteed to drop easy money into your lap.

[The following commentary generated such a spirited discussion in the forum that I'm letting it run for a second day.  If you haven't yet added your two cents' worth, it's time to jump in! RA] Rep. Ron Paul’s proposal to cut spending and taxes by $1 trillion during his first year in office was the most e-mailed story yesterday at Wall Street Journal online.  In a perfect world, perhaps his campaign would get as much attention from the Journal's editorialists as it does from the paper’s readers. Ditto for TV coverage, where Paul seems to get respect only from, of all people, Jon Stewart. Stewart is one of the few commentators who seems to have noticed how well Paul scores with voters even as reporters and news editors continue to ignore him (or rudely disdain him, as is the case with Fox blowhard Bill O’Reilly, who presumed to go toe-to-toe with Paul on a subject -- economics -- that O'Reilly clearly knows nothing about).  Most recently, alas, the newsies have been so busy tearing into Herman Cain’s elemental 9-9-9 tax plan that they will have had little time to ponder Paul’s trillion-dollar idea. Most of the savings the Texas congressman seeks would come from eliminating five cabinet-level departments – lumbering bureaucracies that millions of Americans would doubtless agree we can do without: Education, Energy, Commerce, Interior and HUD.  Other than the vast army of civil service workers employed by these FDR-era throwbacks, who would ever miss them, right? Paul’s plan sounds like a winner to us, but we would urge him to consider adding to his hit-list the U.S. Department of Agriculture, which is not merely counterproductive like the agencies listed above, but nefarious. If you don’t know why the USDA deserves to be deep-sixed, the documentary film Farmageddon will