Two bellwether stocks, Apple and Google, exceeded challenging Hidden Pivot rally targets yesterday, hinting that they will lead the broad averages higher for at least the next several days.  For more than a week, we’d been looking for Apple to reach a minimum 164.22 and Google to hit 602.04.  After climbing to within less than a dollar of those targets, both stocks paused yesterday for several hours. But by day’s end, they had blown past them and were steaming still higher, promising to stimulate a buoyant opening this morning.

Not surprisingly, the Nasdaq 100 Index, of which AAPL and GOOG are key components, finished the session with a gain even though the Dow Jones Industrial Average narrowly failed to get into the plus column. The Indoos closed with a small loss, down 22.28 on the day, while the Nasdaq-based QQQs settled at 53.11, up 0.29.  At that level, the “Cubes” were not too far from a Hidden Pivot target where we were looking to get short. We remain no less eager to do so now, notwithstanding yesterday’s intimation of buying power remaining to be spent. However, although we were planning on initiating the trade by acquiring some December 52 puts without a stop-loss, we are no longer feeling quite so daring and have therefore modified certain details of the QQQQ shorting strategy given in Monday’s Pick of the Day.

An Attractive Bet

The trade is in keeping with our policy of shorting every promising rally target that deigns to get in the way of this bull market. The fact that we can use Hidden Pivots to do so repeatedly without risking much makes the strategy an attractive bet, especially when our Hidden Pivot target has just the right look on the hourly and daily charts.

Remember, there will be no shorting this market after it breaks, since the initial decline will inevitably occur on a gap-opening sell-off so steep that boarding belatedly will be like skiing into an avalanche. And while there may be no certainties in this universe, the likelihood that said avalanche will follow on the heels of a short-squeeze rally into the previous day’s close is almost as sure a bet as that the sun will rise in the East. Bottom line: We can short only into strength because that is the only opportunity we will have.  If we happen to nail “a” top rather than “The Top,” as we have done so often, we can live with that.