Thursday, January 3, 2013

Google has $19 of running room before it reaches the 742.15 midpoint resistance of the pattern shown. That can serve as our minimum upside target for now as well as a rationale for getting long via camouflage.  I'd suggest using a 15-minute chart or less to identify an opportune pattern, but making entry on a chart of even lesser degree.  You could also try to short the midpoint, but keep in mind that any significant progress above it would augur more upside to its 'D' sibling at 848.29.  _______ UPDATE (January 7, 1:23 a.m. EST): Google has rallied $18, peaking just 68 cents from the 742.15 target flagged above.  We'll stipulate that the stock close above it for two consecutive days before we infer that a follow-through to 848.29 is nigh

We continue to hold four Jan 590-600-610 butterflies @ 0.20. Our maximum loss on the position is limited to $80 plus commissions, while a theoretical gain of as much $4000 is possible if Apple is trading around $600 on January 18 when the options expire. Meanwhile, powerful as yesterday's short-squeeze was, the peak of the opening bar failed by 21 cents to surpass a key external peak at 555.20 recorded on December 7. The stock seems likely to get past it on a second or perhaps third attempt, but the fact that it couldn't do it the first time is reason enough to not get our hopes too high about a quick move to $600. In any event, do nothing further for now. _____ UPDATE (January 10, 1 a.m. EST):  The 21-cent failure noted above proved telling, since the stock has dropped $40, or about 7 percent, since then.  Our butterflies are headed toward worthlessness, implying a loss of about $100 including commissions. _______ UPDATE (January 14 at 8:17 a.m. EST): I haven't touted Apple as a bellwether in a while, but the stock's weakness is clearly a drag on the market this morning. In pre-dawn trading, on word that the company has cut back on iPhone5 parts orders due to weaker-than-expected demand, the stock has traded down to $500. This is nearly $20 beneath the 519.33 midpoint pivot of a pattern that projects to 447.55. This target was first identified in Rick's Picks more than a month and is strongly affirmed by today's price action. _______ UPDATE (January 15 at 11:50 p.m. EST): Although the 447.55 target that I've billboarded in my commentary and in the chat room remains viable, there's an alternative Hidden Pivot support of lesser degree where bulls could attempt to regain traction. It lies at 461.64,

Since today's guest commentary concerns the seemingly absurd prospect of a Dow rally to 20,000, I thought it might be a good time for me to at least pretend such a thing is possible. As it of course is.  Technically speaking it's simply a matter of looking at the E-Mini S&P's chart the way I'd look at Gold's -- which is to say, with as a bullish bias that I can justify based on hard evidence.  There are two things to notice in that regard. First, the rally from purple A to B is genuinely impulsive, having exceeded an important external high at 1459.75 recorded in December 2007 (albeit by just 2.00 points). Second, the 1461.75 high recorded in mid-September exceeded a clear 'D' target at 1422.25 (green line) by a whopping 39.50 points. Moreover, a significant portion of the price action since then has occurred above the D target, suggesting it's a consolidation. Even for someone who expects the economy to tank in 2013, as I do, there is no evading the bullish implications of the facts cited above.  Most immediately, the logic of it suggests we'll see new all-time highs near 1553.50 in the weeks ahead. That would represent a rally of about 7% from these levels. Notice that the 1443.75 midpoint resistance (purple p) of that pattern has already been decisively breached by about 14 points. Much as I'd like to say we can go back to being bearish now that we've at least considered the bullish case, we are in fact obliged by the evidence to be bullish.  If there's any hope I can hold out to permabears, it is that a high at 1553.50 -- representing a headline breakout, by 34 points, above the 2007 top -- could in theory set up one of the

The chart accompanying today's E-Mini S&P tout is one of the most important I've published, since it has forced me to acknowledge, despite my strong belief that 2013 will usher in a deep recession, that stocks could go significantly higher over the near term.  While I've posed two alternative scenarios that will at least give permabears something to hope for, it still seems very likely, technically speaking, that the broad averages will hit new all-time highs before the bear comes a-roaring.  Click here to sample Rick’s Picks free for a week, including daily trading ‘touts’ and access to a market-savvy chat room that goes round-the-clock.