Wednesday, June 20, 2012

Hot off the presses is the latest report from Auerbach & Grayson, courtesy of our friend (and paid-up subscriber) Jonathan Auerbach.  Click here for 27 pages of fresh insights that are guaranteed to enlighten, provoke, challenge, entertain and amuse.

The timely topic for this all-day event, sponsored by TSAA, is Technical Insights to Trading in a Complex Global Environment.  Featured speakers are Peter Mauthe of The (John) Mauldin Companies; Denise Shull, a widely recognized trailblazer in the psychology of risk; Michael Burke, Tradestation's VP of Client Training & Education; and Dave Landry, founder of Sentive Trading, a trading and consulting firm. The cost of the event is $150, but TSAA, the oldest society in the United States devoted to the study and development of technical analysis of stocks and commodities, is offering a $25 discount to Rick's Picks subscribers and readers. Click here for detailed information about the conference and/or to register as an affiliate and receive the $125 price.

A 129.75 rally target given here previously remains valid (as does another, close by, at 130.15), but getting short there could prove tricky, since we'd be attempting it following the creation of a fresh, bullish impulse leg on the hourly chart. Obviously camouflage is called for, and it will be best found on charts of three-minute degree or less.   I've set a screen alert and will signal the opportunity in real time if things play out to our liking. 

Use the 27.330 downside target shown (erroneously given here yesterday as 27.530) as a minimum price objective for the near term. It would become an odds-on bet if the 28.210 midpoint pivot with which it is associated is exceeded on a closing basis. Alternatively, bulls would need to muster 30.130, topping a tiny 'external' peak from May 7, to reverse the tide.  More subtly, though perhaps less reliably, they could get back in the game with a close above 29.260 (per yesterday's analysis).

At current prices, the $20 thrust that I'd said yesterday was needed to energize the intraday charts has now grown to nearly $30. Night owls eager to catch a ride on the northbound will have one potentially easy opportunity to do so via camouflage. For this purpose, the 1623.80 'external' peak that I've labeled holds the key, and using it is likely to require a nimble response if a b-c retracement from just above it occurs as we might hope. ______ UPDATE (10:37 a.m. EDT): The tiresome dirge toward a modest, 1653.30 rally target identified here a while back appears to have aborted with this morning's plunge.  At the very least, the weakness has turned the tortuous rally into a duel between bulls and bears, since the weakness is impulsive on the hourly chart. A somewhat larger picture, using May 1's 1674.30 as point 'A', yields a downside target of 1497.90 on the 480-minute chart, so we'll use that as a minimum price objective for the  near term.

I've flagged a promising set-up in the E-Mini S&Ps that could play out this evening, so night owls looking to make productive use of their time should check it out.  A chart has been included that shows graphically why the opportunity is compelling.

With a 1378.25 rally target, our trading bias is bullish for the moment.  Most immediately, that would imply bottom-fishing at the 1344.75 corrective target shown. Camouflage is the preferred means of entry as always, but in this case a straight bid tied to a 1343.75 stop-loss will suffice.  The trade could ripen soon enough to liven the wee hours for night owls.  A completion of the down-pattern to 'D' must be regarded as likely because of the decisive penetration of the 'p' support earlier this evening. _______ UPDATE (2:57 a.m. EDT): Cancel the trade.  Although the 1344.75 target is still valid in theory, the lazy drift of the c-d leg has bent it too far out of shape to be appealing.

In yesterday’s commentary, we cited the punk performance of Apple shares in recent weeks as evidence that the stock market as a whole may have entered a bear market.  “Apple as a barometer? That’s a big stretch,” wrote a regular contributor to the Rick’s Picks forum. We disagree.  After all, Apple is the most valuable publicly traded company in the world – bigger, even, than Exxon Mobil. Given the extraordinarily high expectations that investors (and consumers) have for the company, even a small disappointment – a downtick in sales, perhaps -- could hold serious implications for Apple shares. That in turn could precipitate a major trauma on Wall Street, since so many portfolio managers owe their bonuses in recent years more to Apple’s steep rise than to any other factor. Investor sentiment aside, Apple’s continued success as a retailer is crucial to a segment of the economy that has been devastated by competition from the Internet. As brick-and-mortar stores have fallen one-by-one, Apple’s showrooms have thrived, with lines out the door whenever new products are released. Under the circumstances, the much-awaited iPhone5 had better be stellar in every way, since Samsung will be breathing down Apple’s neck with strong new products of its own. Nor are consumers likely to be impressed by merely incremental improvements. It takes a lot of Wow! factor to get them to pay up for Apple’s relatively pricey hardware.  They are going to be even more demanding as new pricing schemes being rolled out by the phone companies effectively reduce or eliminate the subsidy that has made many smart phones a giveaway item when tied to service contracts. Bear Still ‘Speculative’ From a technical standpoint, the presumption of a bear market in Apple shares is still speculative. Rallies have lacked their characteristic oomph in recent weeks,