I couldn’t have imagined how blessed I was, relatively speaking, when 120 mph winds uprooted 10-foot sections of my fence a month ago and blew them all over the yard. It took me and my neighbor just a few days to fix the damage, but it will take months or even years to undo the devastation wrought by recent mudslides in California, never mind the loss of lives. Around the time rescue crews were packing up their gear, nature was turning ugly in Utah, where a small and usually docile stream in the desert had turned into a raging river, swallowing 20 luxury homes in less than two hours. Fortunately, no one died. Five-thousand miles away, Venetian gondolas sat idle, stranded by a combination of amazingly low tides and exceptionally good weather. New Yorkers were walking around in their shirtsleeves, enjoying a balmy, 60-degree afternoon. And in Michigan, fierce snowfall was blamed for a 50-car collision. Maybe it’s time we started putting quotes around “Mother” Nature?  The metaphor really doesn’t do justice to her hellish side.

A Turning Point for Stocks?

I’ve mentioned here before that spotting potentially profitable hidden pivots is more visual than mathematical. Look at enough patterns and eventually the good ones leap right out at you. When I take pictures with an SLR camera, nearly everything I shot looks “right” when viewed through a 120mm lens.  Similarly, when I look for entry points on a stock chart, it is the 15-minute bars that bring them into sharpest relief. This is a personal preference. Some of my students tell me their favorite “trading chart” is the hourly, or at the other extreme, the one-minute chart. My mentor, Ira Tunik, is the Zen master of the daily chart.

On the inside page at Rick’s Picks, I’ve reproduced a 15-minute chart of the E-Mini S&Ps with a bear-cycle target that practically smacked me between the eyes. The target is below 1160.00, and although there are no guarantees in this business, the pivot is about as high-confidence a place to go bottom-fishing as they come. Tell your broker about it, tell your friends, your day-trading mother-in-law, your boss. But by all means, if you trade the S&Ps, or if you’re merely wondering when 2005’s depressing first act might end, use this "hidden" support to make hay. An initial stop-loss two ticks (!) below it should suffice for those eager to get long with very little theoretical risk at a potentially important bottom. 

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Back on Tuesday

The stock market will be closed on Monday for Martin Luther King Day. I plan to spend the weekend in Vail with my family, so the next time you’ll hear from me is Tuesday morning. Let’s plan on a Q&A session to start off the week, beginning at 11 a.m. EST.. You can send your queries to the usual address  – one stock, commodity or index per subscriber -- any time from Sunday morning on.