September 2011

A previously noted Hidden Pivot resistance at 1224.00 is still my minimum upside target for the near term.  Please note, however, that it would come in the context of the "dueling impulse legs" shown in the accompanying, daily chart.  We should infer from this ambivalent price action that the bounce begun on August 9 from 1072.00 is not destined for greatness; rather, it is most likely a bull trap -- one, perforce, with enough power, persistence and...nastiness to have shaken most shorts loose by now.  If they are to get serious relief and have things go their way once again, it would be signaled by a downdraft today hitting 1182.25.  That would create a strong bearish impulse leg on the hourly chart by exceeding a low that marked a tradable bottom last week.  _______ UPDATE (12:14 a.m. EDT): After opening down 12.50 points Sunday night, the futures have drifted lower, to 1191.25.  They will need to fall a further 1.75 points to hit a Hidden Pivot midpoint at 1189.50 associated with the pattern: (5-minute chart) a=1212.75 on Friday's closing bar; b=1194.50 on Sunday at 6:25 p.m., and c=1198.50.  If the support is crushed, however, the next place where buyers might find traction lies at 1180.50, its 'd' sibling.  Either of those numbers can be bottom-fished with a stop-loss as tight as you can abide, but if the first is exceeded by more than a point or so, the second would become an odds-on bet. _______ UPDATE (11:54 a.m. EDT):  Last night's kamikaze dive stopped at 1181.50, a single point from my Hidden Pivot "deck". Most interestingly, even on the one-minute chart, at least two potential camouflage trades turned into bull traps by stopping out their respective point 'C's.

A previous peak, somewhat obscure, at 1851.50 recorded a week ago remains the number for bulls to beat if Friday's encouraging turnaround is to develop legs.  Assuming the pullback low at 1807.20 made Friday afternoon holds, my immediate upside target would be 1845.90, a Hidden Pivot that will be subject to possible resistance at 1826.60, its 'p' sibling.  (30-minute, A=1786.30 at 9:30 a.m. Friday). This rally pattern is not suitable for a camouflage entry, however, because of the sloppiness of point 'C', a three-bar affair on the 30-minute chart.  You will therefore have to improvise an entry strategy, but there are numerous small peaks made on the way down last Wednesday and Thursday that could serve nicely to set up A-B impulse legs with subtle 'X' entry points. _______UPDATE (11:42 a.m. EDT):  The rally pattern shown in the chart exceeded the 1826.60 'p' midpoint but failed to achieve its 'D' sibling at 1845.90. Instead, the futures have been beaten back toward Monday's lows near 1766 by the ostensibly deflationary "austerity" speech given by our ex-campus radical President. The so-far low has been 1771.00, just 0.50 from the 1771.50 target drum-rolled and spotlighted here in several touts last week. Meanwhile, we shouldn't fear Obama's latest idea, since, like every other leftist, politics-of-envy budgeting scheme he keeps proposing over and over and over again, it has zero chance of mustering a House majority. Want to learn how to nail swing highs and lows precisely, and to manage trade risk yourself? Click here for information about the upcoming Hidden Pivot Webinar on October 5-6 and a $50 discount.

If you've ever suspected that Wall Street stacks the statistical deck to boost share prices, here's an academic paper that explains exactly how it is done.  The author, Wim Grommen, a Rick's Picks reader from the Netherlands, goes as far as calling the constant recalculating and rejiggering of the Dow Industrial Average a pyramid scheme.  Click here for the complete study, which explains how, from a mathematician's perspective, the Crash of 1929, as well as the exponential rise of U.S. stocks during the 1990s, were brought on by bogus math.

No matter what news has driven Apple sharply lower on any given day, week or month in the past decade, there has not been a single instance where the loss was not quickly recouped by strong hands eager to transform each plunge into a swoon. The company has so many fabulously promising revenue streams -- ones, even,  that will produce solid income if the world economy were to slip into Depression -- that we should always be buyers on weakness.  In any event, the stock topped yesterday almost precisely at the 393.56 Hidden Pivot shown (Daily chart where A=365 on August 25),  but if it closes one more day above it, we should expect a test of late July's all time high at 404.

It doesn't look good at the moment for bullion, but check out today's touts for Gold and Silver if you want to know precisely where they'll have a chance to turn around.

Are these guys good, or what? I set alerts a week ago above and below what I had assumed to be the "controlled zone" for the Swissie. Lo, the gnomes have barely let the futures budge. Surely they are having to resist a tide of buying that is counting on Burgher rectitude to prevent the Swiss franc from joining all of the other currencies on the dungheap of international finance?  Whatever the case, the 120-minute chart is bullishly impulsive at its right-hand edge, so let's sit back and enjoy world-class defensive play in the big leagues of fiat money.  Want to learn how to nail swing highs and lows precisely, and to manage trade risk yourself? Click here for information about the upcoming Hidden Pivot Webinar on October 5-6 and a $50 discount.

A downside target at 38.760 flagged here earlier is still my minimum retracement objective, but if it's breached by more than a few ticks, look for the selling to continue down to at least 38.375.  Either of these Hidden Pivot supports can be bottom-fished with a stop-loss as tight as two ticks, but the most conservative way to play it -- the one we will use officially -- is to buy-stop a camouflaged 'X' entry trigger after the futures have closely approached the lower number. _______ UPDATE (12:23 p.m. EDT):  The futures have rallied robustly from a not-very-scary hole, tacking nearly $1.50 onto yesterday's low.  The so-far high at 40.895 is encouraging, but I'd feel even better about it if buyers can take this vehicle seven cents higher, exceeding a 40.950 peak "along the wall" that was recorded Wednesday on the way south. _______ UPDATE (12:31 p.m. EDT):  Moments after the update went out, the futures punched through the 40.950 external peak, further brightening the picture for next week. This is a very bullish sign.

By exceeding the 1771.50 target we were using as a minimum downside objective, the futures have signaled still more weakness ahead.  Barring a very unlikely pop today to 1851.50, which would put bulls solidly back in charge, we can expect the downtrend to come increasingly under the sway of lows near 1700 made in late August.  They will turn magnetic if the December contract falls below 1750, exerting more influence, probably, than any Hidden Pivot support that I might offer.  The futures will have a chance to turn from just above that price today because there's a minor hidden support at 1753.90, but if it fails, you should brace for more selling. _______ UPDATE: (12:17 p.m. EDT):  Gold has pulled back from the brink as has been its wont for the last month, rallying sharply without having reached the 1753.90 correction target I'd flagged. This is ever-so-mildly bullish for the longer term, but the December contract will still need to push above 1851.50 to get out of limbo and revitalize the still-healthy long-term bull market.

A Hidden Pivot resistance at 1224.00 flagged here yesterday is our minimum upside target now that the futures have shredded its sibling midpoint, 1199.75.  Night owls should pay heed to the developing, bullish pattern shown in the chart, since a dip followed by a rally to its still-undetermined 'X' entry price could create a camouflage buying opportunity.