Wednesday, September 10, 2014

The broad averages and the lunatic stocks were synched to the downside yesterday, suggesting there is more selling to to come. Priceline looked particularly bad and may need to fall a further $140 before finding traction at an important Hidden Pivot support on the weekly chart. If the Dow were to fall half as much percentage-wise, it would imply a plunge of about 520 points.

The futures pulled out of a two-day tailspin yesterday, rallying $10 from a low that lay 1.10 beneath the Hidden Pivot target at 1249.20 I'd proffered. The breach of the support was more adversity than I would have tolerated myself, but it evidently didn't stop some subscribers bolder than I from staying in the position with a wider stop-loss. The ensuing ride from the low was worth as much as $1000 per contract, but unless I hear from at least a few traders who stayed long into the close, I'll forego tracking guidance.   The bounce was impulsively bullish on the hourly chart, so any bc-type pullback would theoretically be a buy. _______ UPDATE (Sep 10, 2:23 a.m. EDT): Several subscribers reported in the chat room that they are still on board, so I'll recommend cashing out half of the position at or near current levels. That would leave a position of two contracts with a profit-adjusted cost basis of 1239.00.  For what remains, use an impulsive stop-loss based on the 30-minute chart for now. That would imply exiting on an uncorrected plunge exceeding two prior lows at, respectively, 1254.30 and 1248.10.  I'll further suggest taking off a third contract at 1264.50. That is three ticks below the D target, on the 30-minute chart, of A=1248.10, B=1258.60. The midpoint pivot lies at 1259.60, and if it's exceeded by more than three ticks, I'd rate the 1264.80 target an odds-on bet. _______ UPDATE (after-hours): The futures plunged, initially to 1246.90, stopping out the position for a theoretical gain of a little more than a thousand dollars per contract. A subsequent rally gave way to yet another plunge to intraday low at 1244.00.  The futures rallied into the close, but my projection calls for more slippage to at least 1234.10, provided the point

With Friday's modest selloff, bears racked up their second consecutive day of gains. When's the last time that happened?  I can't recall, but it seems like it's been quite a while. Bears shouldn't get their hopes too high, however, since even if the Dow is on its way back to 10,000, there are enough Nervous Nellies for short-covering to persist the whole way down. More immediately, from a Hidden Pivot perspective the weakness would start to look interesting if  two or more of the labeled lows to the left are exceeded today. The bearish implications would be especially compelling if there are no visually significant, upward corrections to punctuate the fall. Alternatively, if there's incipient buying power still lurking, it will become manifest in downtrending abcd patterns that reverse from 'p' in the manner shown, rather than reaching their D targets.