July 2012

Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzz.

All signs pointed lower at day's end, although the presumptive target, the 1316.50 Hidden Pivot shown, has been too slow in coming to hold much appeal Alternatively, bulls would need to push this brick above the external peak at 1346.50 to show some life.

[Our good friend Victor R. is finding it increasingly difficult to sell things online and at garage sales.  Could it be because everyone has turned seller in order to pay some bills? RA] The media frequently report the chronic disappointment of the political elites that the economy isn’t rebounding.  Is this perhaps because people with different incomes see the economy differently?  The simple fact is that people buy less if they are jobless or working part time.  These days, quite a few of them , including those The Government would count  as employed, are seeking additional sources of income. It may be all the same to the Labor Department’s statisticians whether the economy is creating full-time or part-time jobs, but the latter don’t put much spending money in the hands of those who hold them. Buying power is something that those who work full-time with benefits and some sense of security possess.  Those are the jobs we all want, because they amount to a career. For everyone else, needing to make ends meet leaves one scrambling for other sources of income.  Holding garage sales or selling things on eBay are popular ways to go.  I have experience in both, as a garage-sale seller and the eBay seller. As a garage sale veteran, I have noted patterns of buyers who can be grouped into four waves.  If the sale starts at 9 a.m. the first wave is there and raring to go a half-hour early. When the clock strikes 9:00, they give the merchandise a once-over in less than a minute, then they either leave or make a low bid on one item.  These early birds are the eBay buyers, and they know exactly what they’re looking for and nothing else.  After them comes a second wave of buyers -- dedicated

Because I am using Apple as a bellwether for the U.S. stock market, I'd suggest taking a good look at today's tout and the chart that accompanies it. The stock has turned short-term bearish, but the picture could turn uglier quickly for reasons that the chart makes clear.

I mentioned in the chat room yesterday that it was mainly Apple that's keeping me cautiously bullish on the broad averages.  For that reason, we should pay very close attention to the stock, which sold off hard yesterday.  Technically, AAPL has become a short on the lesser charts, although I'd rather buy bull spreads when it is approaching a pullback target. For now, though, the key support to watch is the microscopically subtle one at 598.40 that I've highlighted in the chart.  Tiny though it be, it's a full-fledged 'external' whose breach would hold bearish implications for the near-to intermediate-term.

Set the snooze alarm for 1612.00. since that's high bulls would need to push this thing by Thursday (or so) to register a pulse.  The signficance of this number is shown in the inset. Want to learn how to do this stuff yourself? Click here for a free trial subscription to Rick’s Picks.

I like the 1323.00 target of the pattern shown enough to sanction bottom-fishing there with a stop-loss as tight as 1322.25. As always, camouflageurs will enjoy the best odds for capturing a tradable low near that Hidden Pivot, but less skillful players looking for an easy way in could do worse. If the order fills and I hear about it in the chat room, I'll establish a tracking position for your further guidance.  Keep in mind that, with an initial theoretical risk of three ticks, you'll need to be in-the-black by at least nine ticks (i.e. 2.25 points, or $112.50) before taking a partial profit.  I haven't drum-rolled this trade in the chat room or under 'Today's Action', so consider it a relatively quiet opportunity.  Note to Pivoteers: The only way the pattern could have been improved is if the first B-C (from July 6) had obtained.

Today's touts are split on Gold/Silver, since the former looks favorable for a bullish trade while the latter begs to be shorted (at least over the very near term).  On balance, I'd weight Silver's failure to exceed an obscure peak yesterday as more telling. You can see it in the chart that accompanies the SIU tout.

Yesterday's tortuous rally died in a suspicious place, a single tick below an 'external' peak so subtle that it doesn't even display as one on the five-minute chart (see inset). Under the circumstances, although I'm looking for a bullish ride in Gold at the moment, I'd suggest keeping your distance from this vehicle today.  For camouflageurs, this one looks like an expert slope to me, with slightly better odds trading from the short side.