November 2012

Apple has fallen a hair less than 19% from September 705 high, but as you can see, the decline has yet to breach even a single prior low on the weekly chart, let along the 'external' we require to create a bearish impulse leg.  That could change in a matter of days, of course, but our benchmark for signaling the possibility that the bear market is only just getting warmed up is a down-leg exceeding 516.22, an external low shown in the chart.  The implied power of the impulse leg, and therefore of the bear  itself, would depend on how many of the three lows I've labeled are exceeded without any upward b-c corrections on this chart.

I seldom use trendlines, but in this case they vividly illustrate what the term 'rangebound' could conceivably mean for gold futures in the weeks and months ahead.  The December contract is currently trading near the midpoint of the rising wedge formation shown, and you can see why calling for a big move up or down from here flouts not only the visual logic of the chart, but common sense.  From a Hidden Pivot perspective, it is a bearish sign, at least for the intermediate term, that early October's peak at 1798.10 just missed exceeding the external high at 1800.90 recorded last March. (Click here to sample Rick’s forecasts free for a week.  You will also have access to the 24/7 chat rooms.)

I've taken a big-picture look at Gold and the E-Mini S&Ps in that charts that accompany today's touts for each.  In the case of the latter, a visual 'matrix' shows at-a-glance where the most important Hidden Pivots lie. They can be used not only for getting long or short, but for making educated guesses about what is likely to happen over the near to intermediate-term.  The chart of December Gold shows why we could be in for a very boring stretch in the weeks and even months ahead.

Today's chart shows at a glance where the bigger-picture pivots lie. There are three bullish patterns here, each with a p midpoint and D target shown in a different color. D's should be used to get short or to exit longs, while p's should be used to bottom-fish.  If it is the latter type of trade you are attempting, camouflage is strongly recommended. _______ UPDATE (November 7, 12:43 a.m. EST):  Since I am unable to imagine an Obama rally, I’ll be paying very close attention to the way in which the ostensibly bullish set-up described above plays out. The very first credible sign of trouble would come today on a  1409.50 print, since that would generate a bearish impulse leg on the hourly chart. ________ UPDATE (10:20 a.m.):  A 2.5% decine would bring the Dow down to 12913, about 35 points beneath the low created by today’s so-far 230-point fall.  Since I can scarcely imagine the stock market declining a measly 2.5% to discount the actual Death of America, I’ll continue to monitor my technical indicators closely, and to trust them over my gut instincts. FYI, the E-Mini S&Ps, currently trading near 1400.00, project to 1364.75 over the very short-term.  This implies a drop in the Dow of 500 points — twice the current amount.

[Because this commentary has elicited such a spirited response, I'm leaving it up for at least one more day.  One point on which we probably all agree is that it'll be great to have an 18-month campaign season over with at last. RA] It would be easy for me to dismiss Obama supporters as mentally defective but for one inconvenient fact: my mother, sharp as a tack at 92, is voting for him. And so is my sister, a San Francisco attorney who is no slouch in the brains department.  I’m not sure where my brother, a municipal employee, stands, but neither am I eager to find out. There is no bridging the political gap between us, and so we simply avoid discussing politics.  The same goes for old friends, although newer ones are another matter.  One of them walked out on our dinner together in a huff when an innocuous remark I’d made about Abe Lincoln evidently bruised his self-righteously liberal, morally perfect heart . Good riddance. It is far better friends than he that I am worried about. Will they draw the line when I let slip my support for the right to bear arms, even concealed?  A few of my wife’s closest friends are unmitigated liberals, and it’s unclear how much longer we’ll be able to tiptoe around the political rough edges when we get together socially. The truce with my siblings and mother has held, but not without strain. When the latter referred to the eminently decent Mitt Romney as “a jerk,” I returned fire with an over-the-top fusillade of anti-Obama invective. That was a month ago, and we haven’t talked about the election since.  Nor do I plan to rub it in after Romney wins on Tuesday -- an outcome I believe is inevitable because

Should we be bullish on the Dow Industrials if the S&P 500 looks ready to fly? Not necessarily, as we discovered when we looked closely at the long-term charts of both vehicles during this session. In the process of technically weighing one index against the other, we came up with a way to recognize which signal to follow if and when it comes.

Silver Wheaton's breakout is most encouraging, especially since it has pushed our vertical call spreads, which we acquired for nothing, well into the black. Take note of today's SLW tout, however, since it provides the exact location of an obstacle that is likely to quell buyers, at least for a while.

A rare spate of negative press has extended Apple's decline, which yesterday exceeded the clear Hidden Pivot target of the pattern shown. This implies that the stock is likely to grope its way down to July's lows near 570 in search of traction. Alternatively, an unpaused thrust above two prior peaks on the hourly chart would not only provide evidence that the worst may be past, but a possible trading opportunity.  If it happens on my watch, I'll post trading advice in the chat room. If you want to receive this information in real time, be sure to check 'E-Mail Notifications' on the My Account page.

We're limited to day-trading now, enthralled to the coin-flip randomness of each session's price action. Thursday's close was bullish just the same, since it vaulted an external peak at 1421.75 recorded last Friday. The fact that the futures have spent 12 hours since then doing absolutely nothing does not portend an ebullient breakout today, but it should at least put traders in a bullish frame of mind. If the futures push above 1433.00, it will raise the obvious challenge of a further push to mid-October supply centered near 1458.