Friday, September 28, 2012

Comex Gold has rebounded sharply from this week's shakedown low and is just shy of generating a powerful bullish impulse leg on the weekly chart.  For further details, see today's December Gold analysis and the chart that accompanies it.

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.

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.)

'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.

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