January 2014

The bullish case would be strengthened considerably if the futures can push above the 1362.30 peak shown without an intervening pullback of $59 or more.  That would generate the first bullish impulse leg we've seen on the daily chart since the August high, 1433.70. Note that this vehicle has been moving very precisely in relation to our Hidden Pivot benchmarks.  For one, this year's bull trend came from a low in early January that was just $1.20 from the 1182.60 target shown. More recently, as noted here earlier, the 1279.80 high recorded on Sunday night 1279.80 missed a 'D' rally target by less than 1.00. From a trading standpoint, camouflageurs could try entering on a pullback from just above 1257.80. That is where an obscure but technically important external peak lies. It was created on the way down yesterday and is visible on the 5-minute chart at 9:35 a.m. EST. One final note: If the rally is going to fail, the 1272.45 midpoint is a logical place for this to occur. It was exceeded Sunday night by $7, but the futures have now fallen below it and appear to be having difficulty mustering another charge. _______ UPDATE (10;23 p.m. EST): Yesterday's crazed action saw the futures abort what had looked like a near-certain run-up to the 1274.80 target of a minor rally pattern. The target remains viable, but the futures need only surpass an external peak at 1272.50 recorded on Monday to refresh the bullish energy of the hourly chart.

The dollar's intraday charts have turned impulsively bearish over the last week, although there is not yet any technical evidence to suggest a serious decline is coming. Nevertheless, we'll need to monitor DXY's vital signs closely, since any pronounced weakness could hold threatening implications for yields. If the downtrend is going to stay within the range of the last few months, we should see a robust (and tradable) bounce from whatever p midpoint forms (see inset for a hypothetical sketch). _______ UPDATE (February 5, 12:55 a.m. EST): The Dollar Index has in fact taken a wicked bounce from 'p' that is bullishly impulsive on the 480-minute chart. This implies more strength to come -- and that any moderate pullback be regarded as a buying opportunity.

DaBoyz deserve credit for being able to coax the futures into a modest uptrend Monday night despite the fact that AAPL is getting the crap knocked out of it following the announcement of punk earnings after the close. No doubt, DaSleazeballs are getting help from dismally stupid buyers, including a few who are all too eager to cover shorts following a rare, so-far two-day selloff. My hunch is that the action could get pretty wild on Tuesday, but that sellers will prevail by day's end.  'Camo' traders will probably need to zoom down to the 3-minute chart or less to play the swings conservatively.

Monday's ratcheting decline turned an ebullient hourly chart into a mixed picture, with bulls and bears locked in a duel.  The former should still be presumed to hold an edge, since the $28 selloff from the recent high amounts to a so-far healthy, 0.618 correction of a $45 rally. It was fully expected, since we were using a 1278.90 target that came within nine ticks of nailing the last top, 1279.80.  Looking ahead, we'll be better able to gauge the power of the selling by monitoring midpoint supports like the one shown. If bulls are ready to get back in gear, we should see abc corrections go no lower than their respective 'p' Hidden Pivots. Alternatively, if this or any other minor abc downtrend overshoots not just p, but the D target, infer that bears will continue to dominate, at least for the near term.

Subscribers are enjoying an invigorating breeze by way of a short position advised in the Diamonds when stocks topped out on December 31. Two additional factors will be in our favor when U.S. markets open on Tuesday: 1) DaBoyz have probably wrung all the mileage they're going to get out of Caterpillar, which could do no better than promise 'stability' in 2014 ; and, 2) Apple, finally feeling the pressure of cutthroat competition in smartphones, announced flat earnings after Monday's close. Uncertainties concerning both stocks were all that had kept the broad averages from resuming last week's lovely plunge; now it can resume in earnest. Enjoy!

The Dirtbags who work the Sunday night shift are ordinarily brazen and aggressive, but they are quite timid tonight, presumably because the pigeons they would prey on are unwilling to venture forth following Friday's exhilarating cascade. If DaBoyz are able to hoist the S&Ps no more than 5-10 points overnight, take it as a sign that that's as much of a rally as they can coax from a handful of witless buyers.

The minor rallies continue to encourage, since each new one has been able to surpass at least one prior peak (labeled #1 and #2) on the daily chart. The next such challenge lies at 1294.70, where an 'external' peak recorded in mid-November lies. If the rally begun last Thursday from 1230.80 gets past it without an intervening correction of more than $19, that would add weight to the bullish case for the near-  and intermediate-term. Note an additional obstacle as well -- a Hidden Pivot target at 1284.00. If the futures pop through it with little trouble, that would imply they're capable of pushing past 1294.7o as well.

When sellers outnumber buyers on a Sunday night, the arse-bandits who run this gaff typically take the index futures down far enough to exhaust supply;  then they wait for a few buyers to show up so that they can goose the E-Minis higher on little or no volume.  Tonight, however, timidity apparently rules, since there is insufficient interest on either side of the market to jockey ES around.  The futures are currently trading an insignificant 1.75 points higher after being down as much as 7 points. My hunch is that if the broad averages open moderately higher Monday morning, ostensibly on good earnings news from Caterpillar, you had better look out below, since it would mean that that's the most DaBoyz are capable of milking from opportune news.  Whatever the case, we'll be able to read their hole cards after we've seen how a follow-through attempt to the downside (see graph) interacts with the midpoint pivot.

With stocks plummeting in January, of all months, it’s tempting to think something in the big picture has changed, or is about to. The evidence becomes even more compelling with the apparent reversal in gold and silver.  Bullion prices have been in a relentless downtrend for more than two years, but they seem, finally, to be getting traction. If their reversal portends an economic sea change, what could possibly be its cause?  A plausible explanation is that Obamacare, by far the biggest new tax ever imposed on Americans, is starting to take its toll. Burdened by health insurance premiums that have been doubling or even tripling for some households, and with astronomical deductibles that leave millions of ACA enrollees more vulnerable than ever to bankruptcy in a medical emergency, consumers have beaten a hasty retreat to their bunkers. If so, The Great Recession is about to resume with 1930s vengeance. Moreover, and putting aside the painful impact of Obamacare on individuals, let’s not overlook the fact that the ACA has pushed a nearly 20% swath of the U.S. economy into chaos, if not to say, to the brink of collapse. Considering that uncertainty is the one thing Wall Street supposedly cannot abide, perhaps we should be wondering why the Dow is not trading 5000 points lower rather than a mere 400. Bullion’s Rally Worrisome An imploding economy would not explain the firming of bullion prices that has occurred in recent weeks, however.  Gold and silver have been so weak for so long that it’s difficult to imagine that they are moving higher now merely in reaction to the stock market’s relatively rare bout of weakness. We might conclude that if the precious metals sector has in fact embarked on a new bull market, something more dramatic than falling share prices