Tuesday, October 30, 2012

Friday's tepid price action did nothing to alter a forecast that had called for a moderate decline to at least 1385.25, a Hidden Pivot target.  Moderate weakness was continuing Sunday night, but the decline was likely to be cut short by Wall Street's closure on Monday due to the hurricane. As noted in the chart -- the same one reproduced here on Friday -- the 1385.25 target is less important for trading purposes than for whatever we might speculate after it's hit.

(Update, Monday, 11:25 a.m. EDT:  Most unfortunately, it now appears that the "Frankenstorm" forecast, if few other predictions we've read about in the news, will prove correct. A meteorologist on the Weather Channel  -- someone who, like me, experienced the March 1962 storm, the benchmark for destructive power visited on the Jersey Shore -- says the similarity between the two storms is clear:  extremely high tides and winds exceeding 100 knots. The kicker this time is that a hurricane AND a Nor'easter will be hitting together, probably causing spectacular destruction in my old home town and along the New Jersey coast.  Early Tuesday morning: The damage has been bad so far, but we won't know how bad until later in the day.  The hurricane caught Atlantic City squarely, flooding the island and demolishing sections of the Boardwalk, but these were fairly common occurrences when I was growing up on Absecon Island in the 1950s. From the news reports and videos I've seen so far, it doesn't look quite as bad as the March Storm of 1962.) What do these current news stories have in common: the World Series, Hurricane Sandy and Benghazi?  Answer:  Each has been covered by the news media in a way that reminds us why we trust journalists even less than we trust bankers, politicians and used-car salesmen. Recently the press has embarrassed itself with boldly mistaken predictions about the Series; courted skepticism by relentlessly hyping “Frankenstorm”;  and disgraced itself as never before by deliberately ignoring an apparent White House cover-up of the attack on America’s diplomatic mission in Libya. Let’s start with baseball’s matchup between the San Francisco Giants and the Detroit Tigers. Heavy underdogs last Wednesday when the seven-game series began, the Giants on Sunday night completed a four-game sweep of the Tigers. Days before