October 2011

The recovery in the second half of yesterday's session stalled at the 1214.50 midpoint resistance of the pattern shown, but if it gives way, look for a follow-through to at least 1236.00, its 'D' sibling. Since Euro-angst remained unmitigated yesterday afternoon, we should probably allow for a negative outcome as well. If it comes, the first place we might look for a turn would be around 1180.75.  That's a Hidden Pivot support, but I don't recommend using it for bottom-fishing (other than via camouflage), since it coincides with some structural supports created last week. _______ UPDATE (12:18 p.m. EDT):  A powerful rally sent the futures soaring 25 points today -- to a 1235.75 high just a single tick from the target I'd proffered. I hadn't explicitly advised a short there, but I hope you were able to make some hay either coming or going.

Eerie, isn’t it, watching the U.S. stock market dog-tail the headlines stirred up by Europe’s never-ending financial crisis. The mainstream media would have us believe that whatever U.S. stocks do on a given day can be attributed to the latest news concerning Greece. In fact, the world’s newsrooms are sinking deeper and deeper into hallucination, since nothing has occurred to alter Greece’s inevitable slide toward default. Halfway into yesterday’s NYSE session, the financial headlines at Google news were telling us that stocks had fallen because of supposed uncertainties over Greece.  An hour later, when stocks rallied to end the day slightly higher, we learned that the “zigzagging” price action had been caused by a series of “conflicting headlines” concerning European debt. Merkel and Sarkozy were not to blame for this, either, since all they did was issue a joint statement that EU leaders would have a bailout plan for Greece in place by Wednesday. We can hardly wait to see what they’ve come up with. But if it triggers more riots in Athens, how are investors supposed to react?  A few months ago, rampaging torch mobs were seen as evidence that austerity measures imposed on Greece were sufficient to satisfy lenders. Now, however, lenders should fear that any futher tightening will send the country irretrievably into civil disorder and chaos. It would be naïve to think that such a spectacle would not have its effect on Occupy Wall Street. But riots? We’d bet against it, at least for the foreseeable future. The difference between Greece’s mobs and America’s emerging tent cities is that the latter are coming to austerity one small step at a time rather than having it shoved in their faces via government edict. But that is not to say that America’s descent has been imperceptibly gradual. That

In case you missed this morning's live webinar, embedded below is the recorded version. Several hundred traders stopped by for the session, during which we identified a number of promising trading opportunities. Thank to everyone for making the event a success.

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.