January 2013

Some Japanese minister was saying the other day that 95 yen to the dollar would be a reasonable objective for the BOJ. But is it do-able?  The chart shows that the central bank may be up to the task. Even with the Swiss now fully engaged in the devaluation wars, Japan has done a quite creditable job turning its currency into ca-ca.  Although it seems doubtful that a collapse to below par can be engineered without a nasty bounce along the way, we'll be better able to gauge  BOJ's odds for success when we've seen a B-C correction on the weekly chart.  It's high time you learned how to do this stuff yourself. Click here to get started.

The list of touts has grown quite lengthy, but you should review them now, since several potentially important rally targets loom in the middle distance. It's been quite a while since we had an itch to short Goldman, but we may get our chance.

Surging stocks have us bears on the run, according to a story played prominently in Monday’s edition of The Wall Street Journal: “Investor Sentiment Is Improving, Making It Harder for Wall Street’s Pessimists to Hold Their Ground”.  Oh really?  We’d thought we were simply enjoying the show. It’s not as though permabears are always short the market, or that we don’t understand that stocks can sometimes veer sharply higher for no apparent reason. In fact, we trade the uptrends when they look promising (as the current one does, up to a very certain point), and we try to short every “Hidden Pivot” rally target that looks capable of producing, if not The Mother of All Tops, at least a tradable swing high that could endure for a few days.  And when those trades work out well, we treat ourselves to a good cigar, or take the Missus to dinner and a show.  We can wait. That’s because we don’t work on Wall Street, where the rare bearish analyst is as welcome as a rattlesnake at a picnic. “I’m getting a lot more pushback than I usually do,” avers Gina Martin Adams, a Wells Fargo analyst who has forecast a 7.5% drop in the S&P 500 this year. Imagine what kind of blowback she’d get if she declared that her long-term target for the Dow is under 1000. We did that ourselves during an interview some years ago on a Bay Area TV show.  When the interview was over and the mics were switched off, the moderator asked whether he’d heard us correctly. Yes, we replied. And we were never invited back. Hard to blame him. Who wants to hear about Dow 800 when the proletarian mind is fixated on Dow 15000?  We’d be the first to agree that, at 800,

January has been gangbusters for stocks, giving us a good reason to look at a bigger picture than usual. With Europe sinking into a deep recession that has now engulfed Germany, and U.S. corporate earnings presumably past an important peak and consumer confidence plummeting, we were surprised to find some compelling rally targets for the broad averages that lie well above current levels. There were no juicy trades to be found during this hour, but even a lack of opportunity held its lessons.

I've got lower targets for Apple, but higher targets for the broad averages.  Should be an interesting week.  Please note that the weekly tutorial session for Hidden Pivot grads has been pushed forward a day, since I'll be traveling on Wednesday.

Although I'd initially said a two-day close above the 742.15 midpoint resistance of the pattern shown would make a follow-through to D=848.29 a good bet, I now see that it is the weekly chart that was featured, and that a two-week close above p is therefore needed to carry the day for bulls.  Regardless, a buy signal has been tripped for 'camo' traders, even if it is unusable at the moment because the still uncorrected uptrend is just too steep.  Any interval of tedium plotted on the 15-minute chart or less could yield the entry opportunity we're looking for, so stay with it if you're interested (and by all means please give me a nudge in the chat room if you see something that you think could work).  Click here to learn how you can do these tricks yourself.

The futures are entering their fourth consecutive week of narcissistic obliviousness to the real world, but there is no gainsaying the possibility that the foolishness could continue for yet a while  longer.  I am purposely not drumrolling a 1548.25 target publicly, but subscribers should keep it well in mind as place where we can short aggressively.  You've seen the chart enough times to recognize how clear and compelling the target is, but I am reproducing it yet again to remind you of why this target is worthy of our patience.

The markets were suspiciously subdued Sunday night -- developing thrust, perhaps, for the next maniacal surge. In retrospect, it seems remarkable that the broad averages were able to sustain an upward trajectory in recent weeks even as the most valuable stock in the world, Apple, was getting savaged. (Breaking news: Apple has fallen to second place, its cap value now exceeded by that of Exxon-Mobil.) The stock has plummeted 37% since September, from an all time high of $705 to Friday’s shell-shocked low of 435.  It must be conceded that even at $705, AAPL was not egregiously overpriced relative to earnings.  Presumably, Wall Street’s renowned shakedown artists have been intent on driving AAPL down to bargain-basement prices because they’re so confident they’ll be able to goose the stock back into the ionosphere before their 2013 bonuses are calculated.  Well, it’s optimists that make the world go ‘round, so perhaps we shouldn’t be so churlish as to deny them the spoils of such deftly executed opportunism. For our part, we’ve hated the stock market each and every step of the way up since, oh, 2009.  But it’s not as though we’re sore losers.  In fact, much of the time, we not only had the rallies nailed, we were able to profit from them on the way up -- and even to short them when they reached swing highs nicely foreseen by Hidden Pivot analysis. We recently attempted this gambit once again as the E-Mini S&Ps approached an important rally target at 1494.50. We came especially eagerly to this task, since we’d just come off a bullish ride from, effectively, 1433.  But discretion prevailed over valor, and we backed away with the futures glowering menacingly near 1500 as last week ended. Unapologetic permabear that we are, a thrust above 1500 would only

The futures may have bettered our longstanding target at 1494.50, but not by enough that we should be impressed. The spike high at 1497.75 achieved via a short squeeze on the opening bar was but a perfunctory test of resistance at 1500, a number that is now close enough to have turned magnetic. It also seems too obvious a place for the bull market to die, and that's why I have my suspicions that the 1548.25 target broached here earlier will be achieved. Let us stipulate in the meantime that the futures close above 1500.00 for two consecutive days before we infer that a run-up to 1548.25 is imminent.