The over-under thresholds can stand as drawn here yesterday (see 10/17 archive posting for chart and details), but more immediately, we might focus on the corrective pattern shown, since it has the potential to drop a low-risk “buy” into our lap. That would occur at the 30.785 Hidden Pivot support shown. ‘Camouflage’ will be essential here, though, since the target is closely coincident with a structural support at 30.710 from October 7 that is all but certain to draw the rabble. _______ UPDATE (9:16 a.m. EDT): December Silver got whacked well beyond our target, creating a quite-bearish impulse leg on the hourly chart in the process. The so-far 73-cent bounce must be presumed to be setting up a D-C follow-through leg to the downside, but bulls would earn the benefit of the doubt if they can turn this disconcerting price action into “dueling” impulse legs with an upthrust, by tomorrow, that exceeds a micro-peak 31.725.
From the monthly archives:
October 2011
The Dow’s failure, after two attempts, to get past the 11717 peak recorded on September 1 is bearish on its face, but technically buyers can keep trying with no penalty as long as the pullbacks don’t ‘go impulsive’ on the hourly chart. That they would do, albeit only mildly, with a print today below 11326; however, a feint beneath the 11051 low from a few days earlier would make for a more impressive jolt to the bullish argument. Notice that yesterday’s selloff doesn’t look so bad on the Indoo’s hourly chart — not that it did on the E-Mini chart either. But rather than speculate on what this might mean, we’ll simply set a screen alert at 11050 to warn of potentially significant trouble.
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So comfortable had I become with the stock market’s daily, thrusting assaults on rationality that I neglected to consider even the possibility of a decline, especially one so refreshingly nasty as what we saw yesterday. My good friend Doug B, The Savviest Financial Advisor I Know (the number two guy on the list is not even close, by the way) thinks this is the beginning of a devastating correction that will bring valuations more realistically in-line with an economy that we both agree is headed into a full-blown Depression.
While he has logic on his side, and even some contrarian boost from the hordes of advisors he insists are too, too bullish these days, I’m going to fall back on technical analysis alone to tell me what might come next. So check out today’s touts for the E-Mini S&Ps and the Dow if you’re interested in a closely reasoned look at the charts using Hidden Pivot Analysis.
Incidentally, I’ll be taking a look at the technical runes in real time later this week. Details will follow shortly, but this will be an online analysis session open to all and to which you can invite your friends.
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Here’s the latest from our far-flung correspondent, good friend and intrepid explorer Jonathan Auerbach, who is always ready and eager to do business where most others fear to tread. Today he is evidently navigating the shoals between Israel and Gaza:
“Entering the occupied territory of Palestine, problematic at best, reached new heights over the weekend for our merry band. One of us, a UK citizen by birth, with one of those funny names including the letter ‘K’ was interviewed for over an hour by soldiers and others convinced he was Iranian. I, always intrepid and straight forward with authority failed the metal detector at the Allenby bridge and was immediately segregated in a holding area for a 30 minute wait until I was pulled into a cubicle by a security person, who pulled the curtain closed and began slipping on rubber gloves; I prepared for the worst. He smiled and simply said, ‘So, where do you have the weapons?’…’You have got to be kidding’, I responded as I explained the location of my titanium prosthesis (Superman for those who play squash with me). An intimate pat down and wanding followed after which he said ‘OK’ and pointed me to the next waiting station without passport, by the way. Around an hour later 3 soldiers, one with my well-worn passport, called me away and interviewed me. ‘Why are you coming to Palestine?’ Answer: ‘I am a broker and I am bringing two clients in to look at their investments and perhaps make more’ Bad answer? Not where I come from.
“More waiting followed and finally we were just told to go, met our driver on the other side and headed for Ramallah (another two Israeli checkpoints along the way). Ok, let’s cut to the chase. Palestine has an electronic book-entry stock exchange (PEX) with global custody and a market cap ~$2.8 billion. Now pay attention…Our local partner, Sahem Trading, believes Palestine will be included in the MSCI Frontier Index by next year. The exchange index (Al Quds) has more less been down for around 5 years and currently at levels achieved in 2004. We would focus on PALTEL (~$950 million marketcap); Holding company PADICO, which owns ~31% of PALTEL (thus valuing its many other holdings at around zero!); Bank of Palestine (BOP) trading slightly over book with a meaningful market share. I won’t be glib and throw Palestine in the ‘Arab Spring’ basket. You should take their recent move to assert their right to statehood seriously, it’s time. Meanwhile you should see a determined nation-in-waiting with an energetic social and commercial fabric. We have thorough research and you can speak with our analysts in Ramallah, speak with Michael Daoud on our Middle East/Africa desk in NY, and place orders with our traders.”
Shortly before 2 a.m. in New York, bullion futures were screwing the pooch while index futures were plodding joylessly toward yet another bullish target. As I implied here earlier, the new October Surprise is… “No Surprise!”
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Europe Buys Time with the Vaguest Plan Yet
by Rick Ackerman on October 18, 2011 12:01 am GMT · 23 comments
So lame is Europe’s latest attempt at spin control that Americans could view it as comic relief from our own worries about the U.S. economy’s accelerating death spiral. Creating a global diversion was doubtless a goal of the exercise, which featured Sarkozy and Merkel, president and chancellor, respectively, of France and Germany, posing for the photo-op unveiling of a scheme – sorry, no details at this time – to put Greece and the rest of the PIIGS on sound financial footing. Never mind that France itself starts to look like a financial basket case if one scrutinizes their books too closely; or that the German people, if not yet their leaders, have lost their appetite for bailing out the rest of Europe. And never mind either that, rather than describing their supposed plan, Merkel and Sarkozy have merely promised to tell us more about it in the fullness of time – reportedly at a November meeting of Euroland’s potentates, wizards and feather merchants. To their dubious credit, and perhaps owing to an understandable desire to avoid the derision of the world, the two leaders did not refer to a “secret plan” when they deliberately left it under wraps; no, they alluded merely to “a plan, ” and we can only surmise that they were fearful of raising the public’s expectations by implying that something new or unexpected was about to be tried. Better instead to maintain and nurture the low-grade cynicism with which most of us have come to regard these announcements. That cynicism seems manageable, at least – presumably until market forces cause the whole shoddy edifice to crumble.
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