September 2008

We noticed yesterday that the 11867 peak of the Dow's recently terminated, thousand-point bear rally lay just at 12 points from a clear Hidden Pivot midpoint resistance at 11855. What this implies is that the bear cycle begun from the August 11 peak is likely to continue at least until 10573 is reached. That's the midpoint's 'D' sibling, and it can serve as a minimum downside objective for now. Even more immediately, the easy penetration yesterday of a lesser Hidden Pivot support at 11213 suggests the downtrend could continue more or less unabated for at least the next 2-3 days.

Nightowls can try shorting 1235.75, stop 1236.25, but only if you're prepared to protect profits on a favorable move initially of as little as 3.50 points. A much bigger pattern discernible in the weekly chart (A=1547.00 on 12/14/07) projects an 1164.00 downside target that is analogous to the one I've flagged in the Dow Industrials as a minimum projection. _______ UPDATE: The futures topped overnight at 1237.50, stopping us out for a loss of $25 or so. They subsequently broke down in a series of wild spasms triggered by bad news on the unemployment front.

If the Cubes take out a Hidden Pivot support at 42.81, that would grease the skids all the way down to 39.03. The lower number would not likely be reached before next mid-week, but if and when the QQQQs get there, I'll post further guidance for bottom-fishing with calls or short puts.

I can find nothing on the intraday charts at the moment that would give me a confident basis for predicting what Gold will do next. However, considering impulse-leg rules alone, it is reasonable to speculate that the tide would turn decisively in bulls' favor if the futures make a heroic leap today that touches 822.50. _______ UPDATE: We discussed this blunder during today's real-time tutorial session, concluding that the bar should have been set at 825.30 -- just above the highest of several peaks, among which 822.40 was the least formidable. Bottom line: 1) Gold is going lower, and 2) the rallies are all short-squeeze distributions.

So much for the notion that Sarah Palin is a risky bet for the McCain campaign. Boy, did she ever nail it. What amazing poise and self-assurance! Maybe now the press will get off her case and focus on issues rather than on Alaskan gossip. As for the Democrats, they can stop high-fiving each other every time her name is mentioned, because a patsy she ain't. Her speech made clear that it is Obama who is the lightweight in this election, with a congressional track record devoid of distinction. ('He has written two memoirs but not one piece of legislation'). And her dig about his losing sleep over whether terrorists have been apprised of their rights was dead-on. He undoubtedly is just that kind of guy, probably keen on appointing someone like Deval Patrick as Attorney General ' assuming his first choice isn't Angela Davis. Yeah, we don't usually get political. But we were fired up to begin with after reading an entire issue of National Review devoted to Obama's negatives. It's all there, including the sordid details of his umbilical ties to the absolute dregs of Chicago politics ' the Stroger boys -- and to Gamaliel, a community-based organization with far-left dreams that evidently has mastered the art of pretending to be politically innocuous. The most damaging testimony in the magazine came from Obama himself, in his 1995 autobiography Dreams From My Father. This was before he was attracting any attention, so the book was more candid than anything he might write now. At the time, he seemed quite certain that the gap between whites and blacks would never be bridged ' that blacks' distrust of whites ran too deep. Obama's Nightmare Nor, evidently, was there more than sentence or two in the entire book that could be construed

There's a Hidden Pivot support at 1258.25 where we could attempt bottom-fishing using a stop-loss as tight as two ticks. Mark the order good till 11 a.m. EDT, since the pivot looks like it will work best if hit early in the session. _______ UPDATE: The pivot got steam-rollered, stopping us out for a loss of $50-$75. We may infer that lower prices likely impend.

A print today at 814.90 would be encouraging, since it would refresh the bull trend by creating a new impulse leg on the lesser charts. If such a thrust materializes, we can use 819.70, a Hidden Pivot, as our minimum upside objective. Its midpoint sibling at 809.80 has already been slightly exceeded, raising the odds of a move-to-target. _______ UPDATE: The futures popped to within two ticks of the 819.70 target before doing what they've been doing best lately: retreating sharply.

The 13.345 bull 'trigger' is still viable, but more immediately we could see a rally to 13.310, a Hidden Pivot, if the futures close above its midpoint sibling at 13.045. _______ UPDATE: Silver was weak relative to Gold this morning, failing by 4.5 cents to reach its minor-trend target before it retreated sharply.

The trajectory of the pattern shown in the inset looks unsustainable, but we'll have more evidence by which to judge it if and when the rally reaches 79.07, a midpoint pivot corresponding to a 'D' target at 82.12. A stall within 2-4 ticks of that number would validate the target itself, and a subsequent move above it would telegraph a finishing stroke to 82.12.