August 2009

The Dollar Index will have a chance to turn from 77.07, a Hidden Pivot support, but even a bounce from that number would not negate an even lower, more important, target at 76.59 given here earlier.

A thrust above _____ is still needed to refresh the bullish trend on the daily chart.  However, if the futures pull back below _____today, that would imply they are not ready for a surge past 1000 in August. Night owls should look for a re-test of the _____ low made at 3:55 p.m. EDT, since its breach would portend more weakness to as low as _____.

Short _____, stop _____. This trade is based on two Hidden Pivots that coincide not far above, respectively, at _____ and ______.  The recommendation would be featured as a Pick of  the Day but for the fact that it may attract interest in night markets that are too thin for comfort. If the expected pullback from the target hits 1005.25, you'll be on your own.

The S&P 500 Index played footsies with the 1000 barrier yesterday, but bears looking eagerly for a major top shouldn't rely too heavily on the stopping power of this benchmark. One reason is that Dow 10,000, a marquee number with greater importance, is still 700 points away. We should also mention that at yesterday's closing price of 9286, the Indoos lay almost 200 points shy of a 9476 target that we flagged a while back as a minimum rally objective. There is also Goldman Sachs, a favorite bellwether of ours that we've been expecting to reach a minimum 173.10. Yesterday the stock pushed as high as 166.29 before settling back to 164 to catch its breath, but it looked feisty enough to cover the remaining distance to the target without much effort. Taken together, these unachieved rally targets suggest the bull still has some running room, although it's possible that Dow 9476 could prove to be a rally-stopper. That number is a "Hidden Pivot" resistance, and it is sufficiently well defined on the daily chart to be considered reliable within about 10-15 points.  That means that if the Dow trades above 9491 intraday, or settles for two consecutive days above 9476, significantly higher highs - in this case, Dow 10,000 - would become more likely, if not quite yet an odds-on bet. Goldman's Running Start The rally in the broad averages dates back to March 9 officially, but as you can see in the chart above, Goldman shares got a running start that began more than three months earlier. The stock's trajectory has also been quite a bit steeper than that of the broad averages, and that is why we have regarded it as a key bellwether all along - a high beta stock with the power to pull other stocks

A Hidden Pivot at 72.39 is as high as I can project using the hourly chart (A=59.30, July 13).  The pattern is not pretty enough to short, and the futures may push a bit higher anyway to test resistance at a series of June peaks ranging up to 74.66, but we should pay close attention at the target nonetheless, especially if  it's hit at the same time the dollar index (DXY) is banging out lows near its target at 76.59.

Friday's carnage breached June's key low, returning a _____ downside target to the spotlight. That is now my minimum downside objective, subject to bear-rally feints and forays to _____, the Hidden Pivot midpoint associated with the target.  More immediately, a lesser pattern projects to _____, the first place were we might expect a tradable bounce. Alternatively, it would take a pop this week exceeding _____ to turn the hourly chart bullish again.

Friday's pop looked encouraging on the hourly chart, but let;s hold the applause until such time as bulls duplicate this feat on the daily chart. That would take a further thrust past the ____ peak recorded June 10 on the way down.  For maximum effect, the rally would need to occur without a pause of more than a day once the first peak at _____ has been surpassed.

Assuming Americans still have the capacity for outrage, they should be rioting in the streets following last week's reports that nine big banks paid out $33 billion in bonuses in 2008. The Wall Street Journal put this travesty in perspective, noting that the bonuses were a third larger than California's budget deficit. "Six of the nine banks paid out more in bonuses than they received in profit," the Journal reported, and "one in every 270 employees at the banks - [a total of 5,000 employees] --received more than $1 million."  Compare these princely sums to the relatively paltry numbers associated with the government's "cash for clunkers" program, which provides a U.S. voucher of up to $4,500 for motorists trading old gas guzzlers for new vehicles. Cash-for-clunkers ate through $1 billion of funding last week in its first four days, prompting Capitol Hill to approve yet another $2 billion, presumably before things turned ugly on the dealers' lots.  Talk about bread and circuses! If the cash-for-clunkers giveaway enjoyed the kind of backing the banks received via TARP, thousands of Americans who don't have two nickels to rub together would be driving Bentleys, Ferraris and Lamborghinis. No Shame Lest you think the banks are embarrassed by it all, it has been reported that Goldman Sachs, for one, is on course to pay $20 billion in bonuses in 2009 -- an average of $700,000 for each and every employee. Over at Morgan Stanley, bonuses are up 30%, to an average $340,000; and at J.P. Morgan, the incentive pool for the first quarter alone has swelled by 175% to $3.3 billion.  These numbers came to light in a report issued by New York Attorney General Andrew Cuomo. Shortly thereafter, New York Rep. Edolphus Towers, chairman of the U.S. House investigative panel, pronounced the news "shocking and

The futures looked bound for a minimum 13.960 when the clock ran out on them Friday. A move to that Hidden Pivot resistance would be encouraging, but they'll need to surpass a peak at 14.470 on the daily chart to clinch the bullish case for the intermediate term.