Wednesday, November 2, 2011

Bullish and bearish impulse legs are dueling on Apple's hourly chart, but the negatives rule right now because of the bearish "island" reversal that has played out since mid-October. This price action is both dramatic and erratic -- owing, presumably, to the wildly speculative uncertainties that Apple faces without Steve Jobs at the helm.  The abcd pattern shown projects to 375.27, and although I'm not proffering that Hidden Pivot as a back-up-the-truck number for buyers, it is a spot where we should look to do some bottom-fishing if the opportunity should arise. _______ UPDATE:  The tedium of this consolidation suggests that Apple shares may no longer be the worldbeaters they were under Steve Jobs. The trade advised above will remain valid nonetheless as long as 409.33 is not exceeded to the upside, but we should also allow for the possibility that three weeks of boredom will be resolved by an uptrend. In this case, the logical target would be 419.85, the midpoint resistance of a pattern that displays nicely on the 240-minute chart, where A=368.49 (10/7), and B=426.70 (10/17).  _______ FURTHER UPDATE (November 17):  Apple has plummeted this week, bringing it down to a low on Thursday at 375.50, just 23 cents from the target I flagged when the stock was trading above $400. I'm not going to suggest that you try to impede a new leg down with a bid today at my target, but I would encourage camouflageurs to try bottom-fishing with any bullishly impulsive abc they can find on the 5-minute chart. The Hidden Pivot is not a 'p' midpoint, by the way, but a 'd' target, and so any significant breach should be viewed as more than mildly bearish.  _______ AND ONE MORE... (November 20, 1:44 a.m. EST): There were a few (very) minor opportunities, but

A look-to-the-left peak at 36.680 (see inset) is analogous to one we're using in Gold to determine whether the correction that has dominated since April is at an end. So that we're not likely to be fooled by a half-hearted rally, let's stipulate that the thrust that takes the December contract above the two peaks shown (see inset) be unpaused once the first at 35.700 is exceeded. More immediately, it'll take a pop above 33.785 today to turn the minor trend bullish. Failing that, the futures would be vulnerable to a swoon down to 32.355, a Hidden Pivot support that can be bottom-fished with a stop-loss as tight as four ticks.  This strategy will remain viable as long as 33.665 hasn't been exceeded to the upside overnight.

Despite a nearly $50 rally from within 30 cents of the correction target given here yesterday, the December contract has dropped two subtle hints that it's not ready to take off. For one, last Thursday's upthrust to 1754.00 narrowly failed to get past a 1757.90 'external' peak from September that is undeniably daunting. And for two, the corrective abcd from last week's 1754.00 high made it all the way to its 'd' target rather than reversing from the 'p' midpoint of the pattern.  These small signs of weakness would be negated by a pop exceeding 1757.90, but until that happens, the burden of proof will remain with the bulls.

Copper's two-week rise remains a case for the textbooks after this week's pullback.  A rally up to 3.6420 would confirm the elegant daily pattern with a target well above the $4-per-pound level.  In evening trading, the futures have impulsed upward by about seven cents, lending credence to the tentative "C" point.  If the bullish tone persists, traders should watch for small patterns that enable a long-side trade with limited risk.  (Posted by Doug "harry" McLagan.)  Want to learn how to nail swing highs and lows precisely, and to manage trade risk with a simple approach? Click here for information about the upcoming Hidden Pivot Webinar on November 16-17.

Stocks have impulsed to below last week's blastoff point, but again we are in limbo with unconfirmed patterns pointing both ways.  If the market keeps moving higher, as it has been doing cautiously since the Tuesday low, a key level to watch will be 1264.00.  That's where a large bullish pattern would be activated whose first target (the midpoint) would be at 1319.00.  The pricetag on its sibling "D" target is not fit to print, and since it is unconfirmed, we'll demur.  If the market rallies somewhat less than that and then turns back down, we'll get some clear bearish targets based on this week's impulsive decline.  (Posted by Doug "harry" McLagan)

[Don’t look too closely or you’ll see that, when the Fed makes loans to banks, it is a cheap parlor trick that involves neither actual money nor any real lending. In the guest commentary below, Robert Moore, a frequent contributor to the Rick’s Picks forum, explains what is really going on. RA] What is the difference between counterfeiting and lending? The Merriam Webster dictionary defines the noun “loan” as follows: 1) Money lent at interest; 2) Something lent for the borrowers temporary use; 3) The grant of temporary use. A loan typically involves an asset that is idle (like spare money, a spare house, or a spare shovel) which someone else can put into economic use; and the rent typically comprises compensation for said use. Rents typically cover wear and tear (if the real asset is a durable good), or are offered as a premium or share of generated profits, paid in good intention for the purpose of showing your appreciation for the lender’s generosity in extending their financial asset for your use. But definition number one above is the one I want to focus on here: money lent at interest. Recently, the wheels seemingly fell off the wagon with that one, because, since early 2009, the Federal Reserve has been “lending” money to large commercial and foreign banks at effectively 0% interest. Why is this important? Look again at the definitions above. If the loan is money, but without interest (which a 0% rate certainly implies), then the lender’s motive behind the loan must be “for the borrower’s temporary use”- meaning that the Fed must be expecting the banks to return the money at some point; otherwise, the “loan” becomes a gift. Now, for a moment, just imagine that your neighbor stops by on a warm Saturday afternoon and