Wednesday, January 23, 2013

Will the fifth time be the charm?  IBM has been lunging for the 196.75 'external' peak shown in the chart since Thanksgiving, so far without success.  Yesterday's hysterical buying fell shy by 73 cents as well, but perhaps bulls are determined to remedy that today?  If so, a pullback from just above the peak would be a camouflageur's dream -- not to mention, bullish for the broad averages because of Big Blue's bellwether status. ______ UPDATE (9:59 a.m. EST):  No subtle camouflage opportunities today, folks, since this morning's memorably vicious short squeeze has goosed the Beemer $12 to a so far high of 208.58. The move is bullishly impulsive on the daily chart, but suspiciously, it has failed as yet to vault October 16's 211.00 high.

This morning's E-Mini S&P tout spells out the details for those who have been wondering how far this January blitzkrieg could go.  I'm not drum-rolling my target publicly since it is so fetching, but  if and when the futures get there, we've got plans.

We hadn't expected the futures to blow past double Hidden Pivot resistance at 1482.00 noted here earlier, but indeed they have. Another impediment yet remains at 1494.50, a target we've held in mind for several weeks; and let's not forget round-number resistance at 1500.00.  Even so, because we have higher targets outstanding for the likes of Goldman and some other short-squeeze faves, it would be less than shocking if the futures ease past 1500.00 before the week's over.  That would leave only the 1548.25 target shown, a number I aired earlier as a potential last-gasp peak.  Judge for yourself, but for this Pivoteer, at least, an easy move past it is almost beyond imagining.  In the meantime, I wouldn't short here other than very cautiously and via camouflage, but if and when this hoax reached 1548.25, we'll want to be the ranch (albeit with risk tightly capped).  Above 1500.00, however, with the 1548.25 target presumably waxing magnetic, bulls are encouraged to go with the flow, applying rather less daintiness than is our wont.

Are T-Bond futures breaking down?  It’s important that we get it right, since, if they are and market forces are about to lay bare the biggest financial shell game in history, we want to be watching from the sidelines when the inevitable panic erupts.  From a technical standpoint, the key number to watch is 143^29, a “Hidden Pivot” derived from our proprietary runes. If this support were to fail we would infer that the selloff had significantly further to go, presumably to at least 141^09, before bulls would have a chance to reverse the tide. By then, however, it could be too late to calm the herd. Interest rates on the long bond would be up by about 25 basis points, to around 3.25 percent, and although that would still be shy of the 3.50 peak recorded last spring, it could suffice to unsettle equity markets and squash a a delicate uptick in real estate that has relied on massive infusions of credit created out of thin air by the Federal Reserve. At the very least, it would give pause to share buyers who have so far gotten 2013 off to a rousing start. To be sure, T-Bonds have pulled out of tail spins before. Early in 2011, they reversed a nasty decline that had threatened to derail the banking system’s recovery from the Great Financial Crash.  And they did so again later that year, saving the day for a mortgage market that might easily have relapsed. This time, however, although T-Bond futures are not in a steep decline, weakness has persisted since summer. Because of this, the markets are in poor shape to withstand whatever shenanigans Obama and the Democrats attempt to pull in lifting the debt ceiling.  In fact, the carelessness with which the subject is being debated