March 2012

We have only praise for IBM, a corporate giant that has long shown a knack for doing things right.  Technically, however, the stock's spectacular run faces a potentially daunting challenge not far above in the form of a 220.48 Hidden Pivot resistance, or perhaps at 226.76 if any higher.  Long-term investors should consider covered-writing their shares if Big Blue approaches the target range.  More immediately, with 13 points of short-term upside potential, camouflageurs should look to leverage any subtle opportunities that arise to get long. _______ UPDATE (April 5): Having achieved no higher than 210.69, IBM went bearishly impulsive Wednesday with a gap-down opening on the hourly chart. Not very pretty. The bigger picture is still bullish, but this week's miserable price action should be regarded as a shot across the bow.

The futures topped a penny above a clear Hidden Pivot target at 32.925 yesterday but stopped short of taking on an important peak at 33.090 recorded a week ago. They look feisty enough to attempt it today, but bulls will need to do a bit more, surpassing the 33.280 peak "along-the-wall" recorded on March 14, to take charge once again.

We hold a 200-share tracking position with a cost basis of 23.79.  With GDXJ stealing up on a Hidden Pivot target at 26.14, let's sell two May 26.73 calls short if and when the target is closely approached.  You should shoot for around 85 cents per call on the sale. We are doing this covered write to effectively take a partial profit without exiting the position.  (Click here for information about the upcoming Hidden Pivot webinar and a coupon good for a $50 discount.)

Yesterday's rally qualified as impulsive on the 180-minute chart, though not on the daily, so we'll use the former going forward. Note that only a small pullback would be required to recharge the futures for another leg up.  The rally would wax even more encouraging if it can knock off another external peak at 1708.40 before taking  breather.  In any case, as is our practice, we'll judge its mettle based on how many prior peaks buyers exceed without struggling for breath.

Seems like only yesterday that we were salivating over the prospect of shorting 1412.75, the juicy 'D' target of a bullish pattern that goes all the way back to January.  Now, however, DaBoyz look like they'll make short work of that Hidden Pivot as they set their sights on a new number in the firmament: 1455.75, the Hidden Pivot target of the pattern shown.  Although I'll encourage camouflageurs to try shorting the 1418.25 midpoint for the practice, the more promising approach will be to look for a way to get long on  whatever B-C 'camo' pullback occurs following a decisive move past the midpoint. The entry opportunity at 'X' could come up fast, so be ready.

It's not hard to understand why so many people actually believe the stock market will continue to move higher indefinitely, or that the Fed will hold The Second Great Depression at bay for as long  as it takes. Just look at how a little gratuitous blather from the 'Nank stirred things up on Monday. Even gold and silver rose on loose talk concerning QE3. It's not as though, without calling it QE3, easy money were not already ratcheted up to a thousand-year high.

Friday's rally was bullishly impulsive on the hourly chart -- ray-rah! and all that -- but rather than trust a flurry of buying during what has been a prolonged period of weakness and failed rallies, we'll require verification by way of a further push above the external #2 peak-along-the-wall at 1685.10. If bulls are truly getting ready to take charge once again, they will not hesitate to tell us so by pushing past the two labeled peaks in an effortless, unpaused thrust.  Otherwise, targets at 1623 and 1588 given here previously will continue to obtain as minimum downside objectives. (Click here for information about the upcoming Hidden Pivot webinar and a coupon good for a $50 discount.)

I've established a 200-share tracking position following last week's dramatic low within three cents of a 23.93 correction target that had been flagged here earlier. Our effective costs basis has been lowered to 23.79 after we exited half of the position for a small paper gain. Because the threat of a relapse still exists, use a stop-loss a 24.12 stop-loss for now. (That's where the lesser intraday charts would turn bearishly impulsive.)  Keep in mind as well that a 22.74 downside target will remain viable in theory until such time as GDXJ rallies above 27.33. If GDXJ were to fall to 22.74, we would become very aggressive buyers.  Meanwhile, it would take a mere 25.46 to turn the hourly chart decisively bullish.

The corrective pattern shown is pure sausage -- not to mention, head-and-shoulders perfection -- but I will offer a projection nonetheless since, sometimes, even the very obvious can pan out as 'everyone' expects.  The 'D' target at 78.965 appears likely to be achieved, since, as you can see, its 'p' sibling at 79.580 has gotten trounced.