March 2012

The correction may have run its course, since the intraday low came within 8 cents of the 102.73 target shown (see inset).  For camouflageurs looking to get long, the five-minute chart is where you should focus. Call one up and notice the series of external peaks made Thursday on the way down, each of which could conduce the B-C pullback that would be needed to climb aboard. Alternatively, a relapse would find presumably tradable support at the 102.46 midpoint of the pattern A=105.97 (3/20, 9:40 a.m. EDT), B=102.65 (1:50 p.m.), and C=104.12 (10:50 p.m.). _______ UPDATE (Monday, 12:19 a.m. EDT): The futures died in mid-flight, creating a downtrending pattern with a midpoint support at 102.98 that we can use -- and bottom-fish via camouflage -- as a minimum downside target for the near term.  Please note, however, that a bigger picture begun on the hourly chart on 2/10 with A=99.60, remains bullish on the hourly chart on 2/10 and projects to as high as 115.

Bulls and bears are well paired at the moment in the duel shown in this 480-minute chart, but the former will need to push past the 32.680 midpoint resistance before the futures would become a solid bet for long-side camouflage. Worst case in this time frame is a 'D' Hidden Pivot at 29.835, predicated on a decisive breach of its midpoint sibling, 31.510.

Impulse legs were locked in a duel on the hourly chart, with neither holding a clear edge as of Thursday night. Short-term, it would be resolved in bulls' favor with a print exceeding 1681.60, a midpoint resistance;  or in bears' favor with the 1644.00 print that it would take to refresh the bearish impulsiveness of the chart (see inset).

We hold a tracking position of two May 68 puts with a profit-adjusted cost basis of 1.34. Since no put option in history has ever been a keeper, we'll need to set a price for yet another interval of profit-taking. Accordingly, I'll recommend closing out half of the position with a good-till-canceled offer at 2.70. ______ UPDATE (April 2, 10:54 p.m. EDT):  In our dreams, perhaps, is where we'll sell one of our puts for 2.70. For now, better that we should place a 1.19 sell-stop on both of them, limiting our theoretical loss to a measly $30 plus commissions.

We exited our position on a 23.59 stop-loss yesterday, so we're looking to re-establish a long position. Our entry strategy should carry less risk than the $1.25 drop we might have faced on a swoon to the compelling Hidden Pivot target at 22.74. This doesn't preclude our initiating a trade on an uptrending 'camo' pattern rather than waiting for this vehicle to come down to 22.74.  However, shortly after midnight there were no suitably easy ABC set-ups for night owls. The search will continue intraday, so if you want to receive the buy signal in real time if and when it comes, be sure you're signed up for intraday alerts. This can be done by checking the appropriate box on the 'My Account' page.  [Click here for details concerning the upcoming Hidden Pivot Webinar and a $50 discount coupon.]

A bullish ABC pattern with a 1455.75 target referenced here earlier is getting messier by the day, but we'll continue to use it because it's all we've got. The midpoint resistance lies at 1418.25, and although it was recently exceeded by 1.50 points, that's not enough to make a run-up to 1455.75 a done deal. Under the circumstances, traders should focus on bullish set-ups, but only those that would pass muster with the finickiest of camouflageurs. In the chart shown, that implies waiting for a pullback from just above external peak #2 at 1412.25. More immediately, a riskier trade set-up would become manifest on the hourly chart with a pullback from just above the 1404.00 peak recorded on the way down yesterday in the wee hours.

Gold was holding earlier gains Thursday night, meandering in a way that could spell opportunity for camouflage-ready night owls.  Fresh touts will be out around midnight, so stay tuned.

You gotta give DaBoyz credit for turning stocks around yesterday, since buyers appeared to have taken the day off. Nor was there much bullish energy as the day wore on – only the nervous drum beat of short-covering ahead of the final trading day of Q1.  It was all window dressing, to be sure, and although the Dow Industrials ended the day 20 points higher, the modest gain belied the dark magic that eventually spirited the blue chip average into positive territory.  After being down as much as 93 points early in the session, the Indoos began to inch their way higher around noon.  Of course, most of the gains came during the final hour, as is so often the case. Bears apparently had second thoughts about trusting Friday to be mellow, especially a Friday coinciding with the end of a fiscal quarter. With earnings growth apparently slowing down, will the broad averages continue to waft higher in the weeks ahead?  Perhaps. Whatever your view on the economy, keep in mind that there is no story, even weakening earnings, that cannot be spun bullishly. The optimists would interpret this as meaning companies have hit a wall on profit margins and will soon start hiring to keep up with sales. A darker view would hold that stagnant household incomes and still-falling home prices are about to smother the consumption side of growth. Yes, we too have noticed that credit card teaser rates are back down to 0.0%, sometimes with no origination fee. But the asset growth on which this seductive scam has always thrived is simply not there. ‘Time for Defense’ Meanwhile, not everyone thinks that higher stock prices are baked in the cake for Q2.  “Traders and investors should use Friday, March 30, to get defensive,” read an e-mail we

The E-Mini S&Ps were just a few ticks from jumping the gun shortly after 3 a.m. EDT, toying with the 1402.00 entry trigger of a rally pattern projecting to 1431.25.  A further rise of 12 points, exceeding the 1411.75 midpoint, would imply the run-up is under way, leaving the stingy bid I'd advised down at 1392 in the dust.