April 2009

Shortly before 11 p.m. Tuesday the futures were probing for support that seemed most likely to materialize at _____, a minor Hidden Pivot support that can be bottom-fished with a three-tick stop-loss. The support is not chopped liver, so you can take an overshoot

Our "Goldman Sachs indicator" got caught in a tug of war yesterday, rising in the early going even though most stocks seemed eager to retreat. Goldman shares eventually fell too -- in the final minutes of the session -- but not before hinting that bulls could have the last word before Good Friday ends this trading week a day early. Notice in the chart below how Goldman's peak yesterday occurred two cents above last Friday's high, 119.76. Two cents may not sound like much, and many chartists would probably read yesterday's high as a double top. However, according to the Hidden Pivot Method that we use to forecast and trade, the tiny overshoot was sufficient to refresh the bull cycle begun almost exactly a month ago. As a result, we view the stock as more likely over the near term to hit 130 than to fall to 100.  It closed yesterday near the middle of that range, at 116.08, down 57 cents on the day.    Regardless of whether Goldman leads the market higher over the near term, we could hardly be more bearish on the big picture. One reason, as even Wall Street's most vocal shills seem to be acknowledging these days, is that corporate earnings for Q2 are going to be not merely atrocious, but catastrophic. Some might argue that the stock market has already discounted this prospect, and that may be so, but it begs the question of whether it has further discounted earnings that could be even worse in Q3 and Q4. While the Obama Administration and Larry Kudlow have their special reasons for reassuring us the economy will have bottomed by then, we suspect that most investors are waiting for better evidence of this than the current, garden-variety bear rally on Wall Street. (If you'd

Upside potential over the near term is to as high as _____, and the target should be considered no worse than an eve-odds bet at this point, since it sibling midpoint at 54.13 has alrady been decisively

The nearest support, a Hidden Pivot at 820.00, does not look like it would be very useful, lying as it does within 1.25 points of yesterday's low. More appealing for purposes of getting long is the look-to-the-left-peak at

Yesterday's plunge lengthened and strengthened the bearish impulse leg begun on the daily chart from 343.27 last week. We've been using 249.04 as a minimum downside objective, but I've going to lower it to

A rally today exceeding 899.50 would turn the hourly chart bullish. That wouldn't be enough to negate our 845.20 downside target -- a print at 970.10 would be needed to accomplish that -- but it would be an encouraging start. If and when the futures fall to

Weak selling Monday night in the E-Mini S&Ps appears for the moment to have met its match in the form of a very minor Hidden Pivot support at 827.00. Even so, it would require quite a leap from current levels to put the bulls back in charge of the hourly chart. Gold, meanwhile, was in a delicate rally, needing another $20 to get back in contention for the near term.

Yesterday's weakness in stocks was attributed to "concerns" about the banking system. At least, that's what we heard on the car radio while we were out doing some errands Monday morning.  Funny how these supposed concerns can pop up at any hour of the day, often for no apparent reason. Scarcely ten hours earlier one might have thought investors hadn't a care in the world, let alone grave worries about the health of America's banking system. It was late Sunday night, and we were just about to turn in as the electronic index futures wafted blissfully higher, up more than 12 points in thin trading. The action implied that DaBoyz were intent on opening the Dow Industrials about 100 points higher on Monday morning. This prompted us to put out a late-night bulletin telling subscribers to buy some April 130 calls in Goldman Sachs, since we hold an option position with slight risk above that price. We advised buying the calls for 2.20, since Goldman shares have been leading the stock market higher and looked like they were capable of leaping the ten points that would have tripped our "yellow alert." Adding to our nervousness was what we have dubbed the Banking Magic Act of 2009. It arrived last week in the form of an accounting change by the FASB that, with the wave of their wand and a little fairy dust, added hundreds of billions of dollars to the banks' bottom lines. Why take unnecessary risks when even the most carefully constructed trading strategy can be instantly undone by such wizardry, right? A Goldman Surprise So there we were Sunday night, ready to pay up for some April 130 calls in Goldman when the opening bell rang Monday morning. Imagine our surprise on awakening to find Goldman shares getting whacked hard

Here's a note that I posted in the chat room shortly after this morning's opening-bell sell-off:  The weak selloff looks like accumulation.  There must have been some weakly bearish news overnight -- not bearish enough to be worth selling on its own, but because DaBoyz had the ES up by such a large amount based on no news.