July 2009

Yesterday's outside day also created a bullish impulse leg on the hourly chart, hinting of more strength to come. Pivoteers might also notice that the rally has camouflaged strength, since it left intact a key high on the intraday charts recorded last Thursday.

A midpoint Hidden Pivot support at 13.540 can serve as a minimum downside target, provided the point 'C' high of the pattern it's associated with, 13.760, is not exceeded first.

Yesterday's low fell a tick above the 50% retracement line relative to the July 13 bottom, but if the futures were to go still lower today they'd hit a theoretical support at ____ that equates to a 0.618 retracement. These numbers will probably serve as well as any Hidden Pivot that I can identify (one of which caught yesterday's low fairly closely -- i.e., within less than 1.00 point). 

The futures have struggled for two days to push above a 981.00 midpoint-pivot resistance, to little avail.  If they can settle above it, however, or exceed it intraday by more than a point, that would imply more immediate upside potential over the near term to as high as _____. For bulls, trouble of at least a minor degree would begin with a print at 962.25. 

The ____ rally target given here yesterday still looks like a good place to try shorting, so we'll use the same game plan, bidding for two September 90 puts (DAVUL), stop _____. They should be selling for around _____ if you want to use a limit order, but pull the bid if DIA exceeds the target.  I have also plotted a hypothetical buying strategy that would apply if the Diamonds zig-zag their way down to a midpoint support early in Wednesday's session.     

You can see the fine hand of government at work in the homeowner rescue package that has been struggling to get off the ground since its inception last spring. The goal was to  reduce foreclosures by lowering mortgage payments for homeowners who were struggling.  But struggling how badly? For would-be lenders, that can be a tricky question to answer, and they are understandably reluctant to commit to the program without clear guidelines from the federal government. As it stands, some homeowners are being told they cannot receive help unless they fall behind on their payments.  But if you were struggling yourself to stay on track, would you take the risk of skipping a payment or two just to qualify?   That's the dilemma facing millions of homeowners, and one we anticipated a while back in the Rick's Picks chat room. When the program was announced, we suggested half-facetiously that subscribers start omitting mortgage payments now and then in order to secure a seat on the gravy train. It was not entirely in jest that we broached the idea, since that's the way government programs work, favoring basket cases over those who are managing to scrape by on their own, however precariously. Now, it would appear, the merely beleaguered are being advised to look more like basket cases by skipping payments. Waste and Corruption As for the three or four million homeowners who supposedly will be helped by the program, so far only about 200,000 reportedly have benefitted. We shudder to imagine what it will take to bring the others on board, since the waste and corruption associated with any government relief program seem to grow exponentially as "clients" are added.  In the meantime, if you think you might have problems paying your own mortgage in the future, you might want to

RIMM looks like it's struggling to reach an 83.14 target, but a close above that Hidden Pivot's associative midpoint at 77.77 should send it on its way.

The Dollar Index didn't get much bounce yesterday, considering how close it came to breaching a major prior low.  That's bearish, but we'll give DXY the benefit of the doubt if it can muster a thrust today above  _____, a peak-let recorded June 20 on the way down. Move convincing, however, would be a push by Wednesday exceeding the look-to-the-left high at _____ made on July 15.

Bears looked tired at the closing bell yesterday and may have used up their selling power for the week unless they get some help in the form of bad news. There are no high-profile earnings reports due out, only the likely confirmation of Sotomayor by the Judiciary Committee.  While that may be bad news for many who cherish the U.S. Constitution, it's not likely to move the markets.