Thursday, October 4, 2012

AAPL's recent low fell within less than $1 of a d correction target at 649.74.  The fact that the stock reversed from d instead of p is mildly bearish, but we'll wait to see how well it performs on this bounce before we infer the worst. So far, the rally is unimpressive, having required a pullback and a running start to get past a middling 'external' peak on the 15-minute chart (see inset).  The target of the move is 680.57, but the stock failed by a few pennies yesterday to vault the 671.90 midpoint.

Yesterday's snoozefest changed nothing in my forecast, which calls for a run-up to 1477.50. From a camouflage perspective, the only 'external' peak that looks suitable for leveraging lies at  1450.00 (see inset).  However, it's close enough to the 'marquee' high at 1451.50 that any entry opportunities are likely to come and go quickly. Under the circumstances, a 'timed' buy-stop should be used to get aboard.

Stocks and index futures have shown a slavish devotion to our Hidden Pivot targets lately.  Only trouble is, the vehicles that we ordinarily trade have barely budged.  The E-Mini S&P futures, for instance.  Yesterday we hung out a very bullish, 1477.50 target for subscribers, implying a 40-point rally equivalent to about 320 Dow points.  This would have been no great 3-day feat during the supposed dog days of summer, when stocks stair-stepped steadily higher no matter what the news. Came mid-August, however, they went flat, taking a 20-day breather to recharge for two single-day spurts that temporarily alleviated the tedium.  Blink and you missed the opportunity. Is the same thing about to happen again?  If not, look out below.  Three weeks ago, the E-Mini went into a dirge after soaring for two days on the promise that Helicopter Ben was prepared -- yet again -- to do whatever it takes to keep the stock market afloat until after the election. Not to rain on anyone’s parade, but we would be remiss if we failed to point out that the broad averages have fallen back to where they were before Heli-Ben came galloping to the “rescue” for the umpteenth time. Stocks Hovering Dangerously Considering the foregoing, it feels like U.S. stocks are in a very dangerous place, hovering all-too-patiently as they wait for “something” to goose stocks again. We can’t imagine what would set them a-surge, even though we’re on record with a prediction of a 1400-point rally in the Dow, to 14969.  Every time we think too hard about this forecast, however, it feels like we’ve gone too far out on the limb.  Still, it’s based on purely technical factors, most particularly the Dow’s effortless push past a 13502 “Hidden Pivot midpoint” that is associated with the target itself.  We