January 2013

Judging from the discussion in the chat room, there seems to be zero interest in trading the E-Mini S&Ps even though I've all but guaranteed a rally to exactly 1494.50. Check out the chart accompanying today's tout if you want to see the fat pitch that yesterday's price action provided to 'camo' traders who were prepared to swing the bat.

The futures finally lurched into gear, presumably bound for a 1494.50 target that should be familiar to all by now.  It was very easy to catch a ride if you followed yesterday's advice, although it would have required initiating the trade at around 7:30 a.m. EST, two hours before the regular session began. It also would have required staying cool as the usual idiots and clowns drove the futures into up-and-down spasms after the opening.  I've reproduced the chart so that you can see how perfectly the 'camo' opportunity I'd described played out.  Chat-room trading discussion mainly concerned gold vehicles, and no one even mentioned the E-Mini trade, so I'll assume there was zero interest in it. Still, there's nearly 30 points of potential upside to leverage for anyone who cares to notice.

[We’ve heard back from our friend James Tolard now that he’s had a chance to digest your responses to his very bullish forecast for stocks and gold.  In the note below, he says that although it’s one thing for James the commentator to offer opinions about the market, James the trader would rather simply do the trade and not have to justify it to anyone.  Those of us who have had the experience of trading with other people’s money know the feeling well.   RA] Interesting responses. You may not remember this about my histoire, but from 1975 through 1998 I had a very good biz as a consultant, primarily in oilseeds, but also as a technical consultant, as the old guard did not take easily or kindly to technical trading. Tech trading was, however, becoming necessary, as the volatility in futures markets was such that even “serene” sideways markets required some money management. Anyway, over time, and as I began to push into my 40's, I realized that no one takes a trading recommendation, particularly if you try to defend, rationalize, or otherwise advance it. Rather, I merely stated strongly and firmly that I think this is true, and that this and that would happen, etc. When I was right, they remembered; when I was wrong, they didn't. BUT, when I gave reasons,  they gave arguments -- usually persuasive ones, too! -- against my arguments, and the result was that I was always wrong. So, going back to a dictum which I think is famous, but if not, it should be:  When you make a decision, always give your decision; never give your reasons. The decision might be right, but the reason are always wrong! Clever. Most Contrarians Are Bears In my bullish forecast, I gave my reasons, including some

With much effort, the futures have ratcheted higher since bottoming four days ago a single tick above a 143^16 Hidden Pivot target that had been noted here earlier.  T-Bonds are by no means out of the woods, and we cannot rely on the daily chart to tell us when this has changed, since it would take a monster rally to create a bullish impulse leg. Under the circumstances, we'll have to lower the bar, stipulating that an impulsive thrust on the hourly chart would at least put bulls back in the game. As shown in the accompanying chart, it would take an uncorrected rally exceeding the two labeled peaks.  Otherwise, a relapse would likely find support and a tradable bounce from the p midpoint shown. _______ UPDATE (9:35 p.m. EST): The futures flirted with danger, dipping below the 144^16 pivot noted above, and another at 144^14 that we pondered during yesterday's online tutorial session.  It's do or die here! _______ UPDATE (January 14 at 1:10 a.m. EST): An impulsive bounce from 144^11 has brought respite, if not to say a reprieve. The current rally pattern targets 146^13, with possible midpoint interference at 145^25.  _____ UPDATE (January 15 at 11:16 p.m. EST):  The futures rallied sharply yesterday to a high at 144^15, exceeding my forecast by a single tick.  The 18-tick pullback that ensued is bearishly impulsive on the 30-minute chart (a new one; see inset), but the short-term picture would revert to bullish if sellers have trouble pushing below the p midpoint of the pattern shown.

Stocks appear to be waiting opportunistically for whatever mote of 'good news' will trigger a short-squeeze from flat price action that has bogged down badly. My 1494.50 target for the E-Mini S&P implies that a 300-point Dow rally is nigh, but as today's trading tout makes clear, it will take patience and diligence to spot the perfect entry opportunity.

With the broad averages flatlining for the fifth consecutive session, we were unable, even, to force a trade during yesterday's GoldSeek demo.  An eventual rally to 1494.50 is still what I expect -- exactly -- but you'll need to hunker down on the lesser charts to find a 'camo' entry opportunity yourself when it finally emerges from the thatch of tedium. Strictly speaking, the 1460.75 look-to-the-left peak flagged in the chart is the only true 'external' high we have available for such purposes at the moment.

If stocks continue their tedious dirge today, threatening to bore you to tears, join us online at noon EST for a technical look at precious metal stocks, futures and ETFs.  The session will be geared toward traders and investors who can benefit from detailed, finely nuanced forecasts for 2013.  Register by clicking here.

My expectation over the near-term is for a rally to exactly 1494.50, but four consecutive days of unregenerate slop (see inset) have left me with little appetite for trading this vehicle.  Prospects for getting aboard via camouflage will be limited, since any thrust that is not impulsive on the 30-minute chart or higher will not likely be worth buying.  By then, of course, every Tom, Dick and Harry will be in on it.   You can learn to do this stuff yourself, and it’s easier than you might think. Click here for information about the upcoming Hidden Pivot Webinar.

Yesterday's rally left me unpersuaded that bulls mean business, although my skepticism would be allayed slightly if they can muster a push today above the look-to-the-left peak at 1667.40 shown in the chart (inset).  Camouflageurs looking to get long should be ready with a buy-stop, since a pullback from just above the peak could set up a slingshot C-D leg into open territory. The bigger picture, referencing the 240m chart, is bearish, with a 1606.40 target that was noted here earlier.  Its midpoint sibling lies at 1650.90, and so that's where the battle between bulls and bears is likely to take place if buyers cede ground over the next day or two. _______ UPDATE (7:40 p.m.): Bulls quit at 1666.00, just shy of the threshold where a rally might have become interesting. The tired price action left my outlook unchanged.