July 2012

Crude's impulsive rally is stronger than bullion's, but it is also more obviously fraudulent, since it is inconceivable that whatever was decided in Europe last week will stimulate the global economy sufficiently to drive up energy consumption.  This is therefore a squeeze well worth shorting, and I'll recommend doing so via camouflage at p and D rally targets on the hourly chart. It shouldn't take long -- perhaps two more days at most -- for the hoax to subside, since it is quite transparent even to the poor schmucks who are short it.  In any case, we'll give it another day to develop. _____ UPDATE (1:10 p.m. EDT):  The phony rally didn't even last a second day. Crude has been down by nearly $3 today at the lows, demonstrating how difficult it could be for us to short into "strength".  _______ UPDATE (July 3, 3:12 a.m. EDT):  The hourly chart wants us to get long now -- or at least not to resist the trend, which has turned short-term bullish again. At this hour, a camo set-up on the hourly chart was playing out thus: A=83.33 at 8 p.m. July 2 EDT; B=84.63 at 1 a.m. July 3; and tentative C=84.03 at around 3:12 a.m.

Pivoteers can refer to today's gold  chart for trading ideas, since the upthrust from Thursday's lows is technically identical to gold's and looks robust enough to produce a follow-through rally.  However, it will take a push exceeding the 28.650 'external' peak shown to put bulls back on the offensive.

The reversal from last Thursday's lows has come without the downtrend's having achieved its 'D' target.  This is a positive sign, but the futures will now need to create a legitimate impulse leg to "actualize" the bullish potential of the rally. So far, they have gotten past only 'internal' peaks, but it will take more thrust -- specifically, enough to clear the  1622.50 'external' that I've highlighted, before we can relax and go with the flow. In the meantime, camo-equipped traders can attempt to get long if the 'x' trigger materializes more or less as shown in the chart.

On the hourly chart, three bullish patterns shown in the accompanying chart were driving this vehicle as last week drew to a close. The first, at 1360.50 is effectively spent since it's just two ticks above Friday's high.  Assuming the futures get past it Monday morning, the next lies at 1378.25 and thence 1398.75.  Judging from the ease with which the rally pushed past the 1337.75 midpoint pivot associated with the lower number, it's probably a done deal.  However, if it gives way easily we should expect the rally continue to the higher, implying a perhaps 350-point rally in the Dow. _______ UPDATE (11:16 a.m. EDT):  The futures are trading inconsequentially lower today, screwing the pooch until DaScumballs can get another short-squeeze going. With a Wednesday holiday to kill trading for the entire week, their task will be difficult but not impossible.  Look for more pooch-screwing in the day's ahead, leading to an attempt on Friday to goose stocks higher when volume has dried up to nearly nothing.

Since Apple is such a crucial bellwether, we will be watching the stock very closely in the days ahead. Most immediately, it is steaming toward a minor rally target at 586.22, a little more than $2 above Friday's close. However, if that Hidden Pivot gives way easily it could hold bullish implications not just for Apple shares, but for the stock market as a whole.  Click here for a free trial subscription to Rick's Picks that will enable you to stay closely on top of crucial developments in real time.

Apple is just too profitable for its shares to go to hell, so the question is, how long might they linger in purgatory?  That could be as bad as it gets for this stock, currently trading 9% below April's all-time high of 644. Even at low ebb of the correction since then, AAPL was down just 17% , a tad less than the accepted bear-market threshold of 20%. Under the circumstances, we should give AAPL every possible benefit of the doubt, technically speaking. From a Hidden Pivot standpoint, all it would take to put bulls back on the offensive would be a relatively modest push to 591.41. That would create a robustly bullish impulse leg on the hourly chart, something the stock has failed to do in two attempts since early June.  I've set a screen alert there, but so should you, since a bullish breakout would have bullish implications for the stock market as a whole. More immediately, the lesser charts are predicting a finishing stroke to Friday's rally that will hit 586.22, at least.  If that Hidden Pivot is easily brushed aside, however, it would shorten the odds of a push past 591.40. _______ UPDATE (July 3, 3:06 a.m. EDT):  The stock did everything we asked of it yesterday, not only surpassing the prior peak at 591.42, but closing above it.  This is bullish for the broad averages, as noted above, and it also makes a pullback from these levels a 'buy'. The move would be even more bullish if it goes on to exceed yet another 'external' at 596.76 without correcting in B-C fashion on the intraday charts. Most bullish of all would be a continuation of the rally past the key 'external' peak at 618.00 recorded on April 25. That would turn the daily chart impulsively