September 2012

Little Patterns Hold Key

– Posted in: Tutorials

A 14969 DJIA projection in Rick’s Picks seems so preposterous that we took time to verify it on charts both big and small. The lesser charts will work best at this point, since we need a finely nuanced indicator to warn of even a hint of weakness. We also pondered December Gold’s recent failure on the weekly chart to surpass two important peaks made late last year and in early 2012. This could mean imply that on a breakout above $1800, gold futures will not be sufficiently energized to continue to $2000 without taking a few breathers. As always, the key to getting the forecast right lies in correctly interpreting the lesser charts.

GCZ12 – December Gold (Last:1784.30)

– Posted in: Current Touts Rick's Picks

This week's 1756 low has become a springboard to 1808.30, the plain as-day target of the pattern shown. If that Hidden Pivot is reached it would create a bullish impulse leg of weekly-chart degree, surpassing February's 1800.90 peak. However, it wouldn't take much more than that -- specifically, a further push above 1815.00, to conquer a second 'external' peak --  greatly increasing the imputed power of this rally.

AAPL – Apple Computer (Last:669.11)

– Posted in: Current Touts Free Rick's Picks

We hold a tracking position of eight Nov 730-Oct 730 call spreads for 7.00 -- roughly midway between high and low prices reported in the chat room.  The stock's rebound from yesterday's deftly engineered low was impressive, but buyers will need to push AAPL a further $12 to create a true bullish impulse leg on the hourly chart.  If the stock simply rolls over today, we should expect a reversal from the p midpoint of a pattern like the one shown if bulls are sill in command. _______ UPDATE (11:50 a.m. EDT):  Apple has relapsed this morning and is attempting to find traction very near the 'p' midpoint I'd sketched in the chart (see inset).  It lies at 666.37, versus an actual low thus far at 666.75.  If the support gives way it could spell jeopardy to as low as 650.57, the midpoint's 'd' sibling. (In as little as four to six weeks, you can learn to do this stuff yourself. Click here for  free trial subscription to Rick's Picks.)

ESZ12 – December E-Mini S&P (Last:1442.00)

– Posted in: Current Touts Rick's Picks

'Dueling impulse legs' left bulls and bears pretty evenly matched when yesterday's regular session ended, so we shouldn't be surprised if today's ups and downs end the week with the futures little changed from Thursday. In any case, night owls seeking traction should focus most immediately on the bullish pattern shown, since it proceeds from an eminently legitimate impulse leg on the hourly chart.  The rally is too obvious to perfectly suit our needs, but if the futures make their way higher overnight, odds favor a launch from a second or even third point 'C' low.  ______ UPDATE (1431.25)  Unmitigated weakness took the futures down this morning without even bothering to trick bulls with a 'bad'  C' or two. The downdraft projects to 1411.50 if the 1428.00 midpoint -- missed by 1.00 point so far -- is decisively breached.

Suppose Our Bullish Forecast Goes Awry?

– Posted in: Commentary for the Week of March 8 Free

Our very bullish projection for the Dow Industrials, currently trading near 13485, calls for a powerful, last-gasp rally to 14969 before the elections.  But what if the blue chip average were to simply fall from these levels without rallying to new highs?  At what point would we give up on our target? asks a reader who goes by the handle  “Mega-bear” in the Rick’s Picks forum.  Before answering his question, we should mention that the trading “touts” and forecasts that are hidden from public view are much more finely nuanced than those you see trumpeted here occasionally in the headlines. (Click here for a free trial subscription to see how subtle and useful this information can be.)  Moreover, and regardless of what the headlines would seem to imply, we are always prepared to turn on a dime, going from very bullish to sky-is-falling bearish if changes in the technical picture warrant it.  That said, let’s looks at the technicals to see where things stand right now. 14969 is the rally target of the of the ABCD pattern shown above. By our lights – i.e., Hidden Pivot Analysis – a surge to that number became an odds-on bet when, two weeks ago, the Dow bulldozed its way past 13502, a “midpoint pivot” mathematically related to the D target itself.  Notice in the chart that the first time buyers encountered the midpoint resistance, they showed no hesitation in pushing decisively past it. It is the ease with which they did so that boosted our confidence that the midpoint’s D “sibling” at 14969 would eventually be reached. Importance of Minor Swings Even so, there’s reason to be cautious, since a recent peak 13653 came very close to a secondary D target at 13639 that has the potential to be a major top.  Considering

Apple Has Our Attention

– Posted in: Free Rick's Picks

Bellwether Apple has gotten slammed this week and is close to breaking down on the hourly chart. Although we've seen zero bull traps in this stock in years,  we should be prepared for one nonetheless. Real trouble would be signaled if the downtrend, presumably still a correction at this point, overshoots a 'D' target on the hourly chart.

CLX12 – November Crude Oil (Last:90.29)

– Posted in: Current Touts Rick's Picks

Hidden Pivot analysis tells us to expect lower crude oil prices, but the market might need to work off an oversold condition first.  On Wednesday the futures broke through the midpoint of a very elegant pattern which began at A=99.81.  We take this as a signal that the 'D' target of 84.99 is in play, but two things should give us pause: the pattern has unfolded quickly, and its BC retracement was only 33%.  There is another important pivot to bear in mind, the midpoint of a much larger pattern with A=107.15, yielding a midpoint at 86.57.  Both of our downside targets are below strong support in the area of two prominent prior lows around 87.50.  A tightly-stopped buy of the 84.99 pivot is not recommended, due to its proximity to the round $85 number and to its proximity to an important prior low at 84.91.  If the oil price continues to move up from here, we'll want to take a fresh look at the charts and view yesterday's low as a 'B' point.  (Posted by Doug “harry” McLagan)

GCZ12 – December Gold (Last:1759.20)

– Posted in: Current Touts Rick's Picks

On Wednesday the gold futures declined enough to produce the largest pullback of the recent strong uptrend, but we still don't have enough of a BC leg to work with.  The 26% decline from the $1790 high and the subsequent $24 rally, which is extending in the early morning hours of Thursday, raises the question whether the large impulse wave will make new highs.  The alternative is a lower low and a large pattern that we can take seriously.  The impulse would retrace by about a third with a decline to $1724.  Yesterday's sharp drop, which was underway when the trading pit opened at 8:20 a.m., produced a "wall" from 1763.50 on down.  The recovery has thus far narrowly missed that prior high (at 1763.50), visible on the 5-minute chart.  Nonetheless, most of the decline has already been retraced, which means that the powerful move has been almost neutralized in Hidden Pivot terms.  If the current session high of 1762.50 holds, we should keep an eye on the targets associated with A=1768.40, namely a midpoint at 1747.60 and a 'D' target at 1732.40.  If the uptrend continues, look for resistance at the midpoint of a larger pattern at 1773.30, as depicted on the attached chart.  The pattern's 'D' target at 1808.30 is not a place to sell or to sell short, as it is only slightly above the higher of two major prior highs going back to last year.  (Posted by Doug “harry” McLagan)