July 2009

A Hidden Pivot at 959.90 is still my minimum upside target for the near term, but a pullback to 945.10 Tuesday night can be bought with a stop-loss as tight as three ticks. If it's hit, look for the selling to continue to exactly 940.30 (which also can be bottom-fished, stop 939.90). _______ UPDATE (1:08 a.m.):  The action has turned too sloppy to read, other than on the very lesser charts. My hunch is that tonight's gratuitous spasms will be replicated on a larger scale as the day wears on.

The E-Mini S&P poked its snout above June's peaks yesterday, daring bears to stand firm.  For our part, we'd prefer to step aside while the futures make their way toward _____, a Hidden Pivot from the weekly chart that will serve as a minimum upside objective for the near term.  Please note that that would fall a smidgen shy of the _____ print (see inset) we'd said was needed to refresh the bullish trend on the longer-term charts.

The stock market carved out yet another bowl-shaped formation on the intraday charts yesterday, making everyone who bought the dip a lucky winner. Stocks have swooned in four of the last five sessions and closed higher for six consecutive days, but yesterday's swoon was a little more dramatic than the others. Some attributed the selloff portion of the day to mounting concerns that President Obama's tax proposals will soak not only the "rich," but the middle class. Whatever misgivings investors may have had about this were forgotten later in the day, however, when Helicopter Ben, in testimony before Congress, promised there would be no tightening until such time as the tempo of the U.S. economy picks up significantly.  This should have come as good news to monetarists, since, given the grave structural weakness of the economy, it might be another ten years before things start to pick up significantly. Interest rates aside, our colleague Larry Amernick (click here to sample his work) sees clear evidence that the Fed has begun to withdraw liquidity from the markets. "The party's over folks!" he wrote recently. "The Fed's not your friend any more. It is slowly withdrawing the massive amount of liquidity that flooded the markets with excess reserves after the collapse of Lehman Brothers in October 2008. This is occurring at the same time the economy appears to be rolling over again." Larry believes, as we do, that the Fed did not accomplish much -- other than to goose shares: "Although fueling a short and powerful cyclical bull market during Q2 (with the S&P 500 up 43.4% from trough to peak)," he writes, "the Fed failed in its basic goal of providing full employment and stable prices. Alarmists argued that the 100%+ increase in the year-on-year change in the Monetary Base would

Rick Ackerman  gives his views on the continuation of the rising conventional stock market in this concluding segment of The Korelin Report.  Click here for audio.

I've provided a rally target for the Dow Industrials, since there is more clarity in the chart than I could find in the E-Mini S&P's hourly bars.  There's a short you can attempt in the Diamonds along the way, but if it gets stopped out bears should dive for cover.

The futures will need to pop above a midpoint resistance at 117^08 to "actualize" the potential of yesterday's thrust. Thereafter, a Hidden Pivot at 117^28 would be the minimum upside objective.

The 173.10 target given here earlier is still viable, so keep it in mind if you have a hankering to short this little sonofabitch.  I'd suggest a stop-loss no wider than 22 cents.

The futures look bound for a minimum 14.015, but you might look for a tightly stopped buying opportunity on a pullback to 13.540, since that's the midpoint pivot associated with the target. You could also buy a camouflaged entry on the first abc uptrend that occurs after 13.540 is touched.

A Hidden Pivot at 78.49 can serve as a minimum downside objective for the near term, and a close below it would be quite bearish.