Friday, November 16, 2012

Apple may have turned a temporarily redemptive head-and-shoulders pattern into suet yesterday, but the stock will still have a chance at 512.70 to reverse its slide.  That's the 'D' correction target of the pattern shown, but it is not sufficiently compelling to try bottom-fishing other than via camouflage. The Hidden Pivot seems likely to evince at least mild support, but if none is forthcoming you can infer that a test of round-number support near $500 looms.  A more precise number, using the 30-minute chart with night bars, lies at 497.63 (A=590.74 at 9 a.m. on 11/6; B=533.37 at 7:30 a.m. on 1/9; and C=555.00 at 3:30 a.m. on 11/12).

The Comex chart looks somewhat stronger than Silver Wheaton's, and so we should wait before throwing in the towel as we've done in the stock.  It would take but an 80-cent rally to generate a bullish impulse leg on the daily chart (see inset), but that might be asking too much at the moment, since the duel between bulls and bears has definitely tipped in the latters' favor since early October.

We hold a single contract tracking position in the E-Mini S&Ps -- a bear trade that has racked up a paper gain so far of nearly $6000. However, I've suggested covering it and going long if the S&Ps fall to a very compelling Hidden Pivot target shown in the chart accompanying today's tout. This advice should be disregarded if all hell breaks loose in the Middle East -- a strong possibility now that Hamas evidently has begun launching rockets at Tel Aviv.

The pattern shown leaves little doubt about the downtrend's immediate destination, a Hidden Pivot target at 1321.25.  We remain short a single contract which, if covered at 'D' , will produce a theoretical gain of about $7500. (You can review this trade in the archive to determine whether you'd have taken it. Click here for a free trial subscription.)  That's what I'm advising, since the target looks compelling enough to warrant a speculative long.  Officially we'll look to board with a 1321.50 bid, stop 1320.75, but if you're up to it, start looking for a 'camouflage' buying opportunity from around 1323.00 on down.  Please note that my target is derived from the one-off 'A' at 1430.25 rather than the visually obvious one at 1431.75.  This implies that if the downtrend should breach 1321.25 by more than perhaps three ticks, the true bottom would come at 1319.75.  It too would be tradable -- with a stop-loss as tight as four ticks. Alternatively, and since we should always leave room, even, for the high  unlikely, an upthrust exceeding 1368.50 would put bulls back in charge, at least for the near-term.  Camouflageurs looking to nickel-and-dime the entry risk of a bull trade may find this possible on a shallow b-c pullback from within the range 1368.75-1370.25.  ________ UPDATE (Nov 19, 1:04 a.m. EST): I forgot to mention this above, but you should keep the short tied to an impulse-leg stop on the hourly chart.  That implies a print at 1388.25.  Otherwise, all other advice proffered here earlier continues to apply.

[DaBoyz attempted to goose stocks in the final hour yesterday, though without much success. Perhaps this was because they had already sprung the same stupid trap on bulls earlier in the day with a short squeeze on the opening bar. Now, even if They manage to close stocks higher ahead of the weekend, the mood is unlikely to linger into next week, since most of the bellwether stocks mentioned below decisively breached fail-safe supports intraday. Apple, in case you're interested, did fall off the cliff, telegraphing a further plunge of nearly 5%, to 501.74, over the near term.  RA] A stall has turned into a power dive on Wall Street, with some bellwether stocks plummeting toward key supports flagged here just a short while ago. One of them, IBM, actually breached a “midpoint Hidden Pivot” support yesterday at 187.78, and that spells more trouble for investors. The actual low at 185.25 was not far beneath the 187.78 support, but the latter number should have held very precisely if the stock is to avoid yet more carnage. Under the circumstances, IBM looks primed to fall a further $8, to at least 177.56, before it has another chance to get traction. Meanwhile, Google, another stock whose year-end performance will weigh heavily on portfolio managers’ bonuses, relapsed to an important Hidden Pivot support of its own at 650.69. We’d drum-rolled a possible reversal from that number last week, and it came in the form of $20 rally from exactly 650.30.  But if Google were about to recover its mojo, the rally should have lasted perhaps 8-12 days. Instead, it appears to have petered out in just a day-and-a-half, strongly hinting of significantly lower prices to come.  Our minimum downside projection for the stock is now 605.83, a number you should jot down if you trade this