Friday, May 25, 2012

Apple looked like it was down for the count a week ago, but this week's rally has improved the odds that bulls will live to fight again. First, though, they'll need to exceed an external peak at 591.40 that is shown in the chart. If this happens without an intervening b-c pullback of 30 or more points, we'd rate the stock slightly less than an even-money bet to retest the all-time high. Calling the turns confidently is easier than you might think.  Want to learn how? Click here and get a $50 discount to the upcoming Hidden Pivot Webinar on June 6-7.

Although 'everyone' supposedly is short the euro right now, the technical signs indicate that it could continue to plummet nonetheless.  Take a gander at the chart included with today's tout to see just how low it could fall this summer.

The June Euro is overdue for a bounce now that it has dipped beneath January's 1.2645 low. That would have provided an opportunity to run stops and segue into a trampoline rally with relatively few bulls aboard.  So far, however, it hasn't happened, and the further bad news is that the 1.2720 midpoint support associated with a 'D' target at 1.1946 (!) has gotten crushed. Bottom line:  Even though 'everyone' is short the euro, it appears capable of falling much lower nonetheless.

Based on the hourly chart, I give bears a slight short-term edge in the duel of impulse legs that has played out during the last week.  However, if bulls are going to regain the offensive, we should see a tradable low occur at exactly 27.665, the p midpoint of the minor downtrend shown in the chart. You can bottom-fish two contracts there with a stop-loss as tight as three ticks, but if you use 'camouflage' and are able to identify an entry opportunity with no more than $70 of risk per contract at entry, you should go for it.  If the long position survives the night (or perhaps morning) and at least two subscribers report having done the trade in the manner suggested, I'll establish a tracking position for your further guidance. In any case, half the position should be exited at the p midpoint of the small ABC pattern used to make entry. ________ UPDATE (May 28, 11:51 p.m. EDT): The futures have suspiciously failed to surpass any external highs in ultra-thin, post-holiday trading. If they should surprise with an upthrust, however, the first hidden resistance where we should look for a stall lies at 29.245 (60m, A=26.730 on 5/16).  A decisive breach would imply bulls are gaining sufficient strength -- a possible enticement to alert camouflageurs (as well as a shot-across-the-bow of venturesome bears).

The Gold Bugs Index has done all we asked of it and more, refreshing the bullish vitality of the hourly chart with a push past an 'external' peak recorded on May 4.  We can use a Hidden Pivot at 436.40 (see inset) as a minimum upside objective for the near term, but if HUI should pull back to the 414.37 midpoint associated with that number, Pivoteers can try bottom-fishing on the 5-minute chart or less. ______ UPDATE (May 30, 1:20 a.m. EDT):  From a recent high of 433.02, HUI has pulled back to within less than a point of the 414.37 midpoint flagged above. The implication is that this vehicle has bottomed and can be bought via camouflage. I suggest using the one-minute chart to reduce theoretical risk to a minimum.

[We go off the beaten track this morning with some reassuring scientific news about the aging brain. Merely staying mentally active, as those who post regularly in the Rick’s Picks forum are wont to do, is enough to keep the circuits firing and the brain supple enough, even, to learn new tricks.  This guest commentary was written by my Chocorua, New Hampshire host Mary Peaco Todd.  She is a cartoonist whose work can be found here. RA] I remember when my fifty-some-year-old husband wandered into the kitchen after an evening of cramming.  He was the oldest student in his law school program and, although he had graduated cum laude, the dreaded Massachusetts Bar Exam loomed. “I have a problem,” he said.  “My brain is full.” “Full?” “Full. And I still have Contracts and Constitutional Law to review.” “Well,” I replied, “what are you going to do?” He shrugged.  “I have no choice.  Something’s gotta go.  I’m going to have to delete childhood.” Judith McDaniel, a colleague in the Union Institute and University program where I teach, recently posted a blog about her own experience entering law school at an age when some folks are not thinking much beyond the next early bird special.  She accurately accessed her strengths – fast reader, good at retaining information, able to identify and communicate the main points in a text – and her weaknesses – memorizing and short term memory – but beneath all of her deliberations nagged one fundamental question: Was her sixty-year-old brain simply too old for school? Happily, for Judith and for the rest of us, the answer is no.  The latest research indicates that aging brains not only continue to develop but even have some advantages over brains that are younger. In a recent article in the New York Times,

Buyers head-butted structural resistance all day long, unable to muster the modest push it would have taken to reach the 1329.75 target given here yesterday.  They were getting second wind in after-hours trading, however, exploiting the absence of sellers that is typical for this time of day.  The target remains valid but holds no special value for us either for trading purposes or forecasting.  If it is exceeded by more than a few ticks, however, look for more upside to a somewhat higher Hidden Pivot at 1333.25. _______ UPDATE (7:49 a.m. EDT):  The futures topped precisely at 1329.75 overnight.  If you got short there on your own initiative, I'd suggest covering half the position now at 1323.25.  The pullback has somewhat exceeded a 1321.75 target defined by the pattern (on the 5-minute chart) a=1329.75, b=1324.25 (5:50 a.m.) and c=1327.25, for d=1321.75.  A new and very minor bearish pattern has developed since with a 1318.50 midpoint and a 1321.50 'd'.  This is small stuff, although the numbers are nonetheless tradable via camouflage -- or if bottom-fishing, via straight bids and three-tick stops.