March 2014

Suppose you were a Master of the Universe who makes $2 million a year plus bonuses just for kiting stocks with Other People's Money. Wouldn't you want to bring the so-called 'momentum stocks' back down to levels where you could start the process all over again, attracting a whole new flock of rubes to fleece? Of course you would.  And that is what I think is happening to stocks like Priceline, Netflix, Google, LinkedIn and Twitter. We could speculate about what sort of prices They might deem reasonable in today's nut-so, quote-unquote investment world, but it would hardly be farfetched to imagine that Wall Street's thimble-riggers will consider their goals met when Priceline and Google have symbolically fallen below $1000.

A few of the momentum crazies, including Priceline and LinkedIn, are still struggling for traction, but they look increasingly likely to get dragged back into bullish gear by DJIA and S&P indexes that refuse to give up ground.  Gold looks lower, however, so check out my tout and chart for Comex April futures for precise, actionable details.

We've been using a Hidden Pivot at 1280.90 as a minimum downside target for the near term, but another is coming into focus at 1283.50 (see inset). Together they are going to exert a magnetic pull on the futures that looks likely to draw them at least a little lower before the good guys can take command again.  That would occur instantly with an upthrust exceeding the 'external' peak that I've labeled at 1329.80. However, anything short of that should be regarded as noise. An imminent fall to the 1283.50 target, or perhaps to 1280.90, would announce itself via the breach of the midpoint pivot at 1300.75. Any of them can be bottom-fished with a tight stop-loss. _______ UPDATE (10:59 a.m. EDT):  After rallying as high as 1317.10 overnight (i.e., 'noise'), the futures have relapsed to a so-far low at 1300.90 that is less than two ticks from the Hidden Pivot midpoint noted above.  If and when the support fails, look for a swoon to either of the two HPs that I've flagged.

When the dust settled yesterday, the futures had chopped their way to the exact middle of the gratuitous range they've carved out over the last month or so.  Traders looking to chase boredom should consider flipping a coin to determine which side of the bet to take next.  However, if someone were to put a gun to my head and ask me to predict where the next significant move will go, I'd say to the 1830.25 target shown. The futures would first have to take out the 1847.25 midpoint pivot (the red line) without having first exceeded 'C' to the upside.  Were that to occur, you could bottom-fish at 1830.25 with a stop-loss as tight as two ticks. Alternatively, an upthrust exceeding the 1866.00 would put bulls back in charge, at least for a while and even though they might not get very far.

Nasdaq stocks have gotten hammered far more savagely than the Dow and the S&Ps lately -- a divergence that feels like part of the natural process of shaking down widows, pensioners and orphans as viciously as possible in order to make them puke up their shares at fire-sale prices. The weak and meek looked pretty well spent by the close, however, so expect the stock market to be back in bullish gear shortly and at least for a while.

Priceline, a bellwether for the Nasdaq 'lunatic' stocks that butter portfolio managers' baguettes, was down nearly $60 at one point yesterday. Like the Nasdaq Index itself, however, the stock reversed from a low that was just a hair shy of a compelling Hidden Pivot support on the intraday charts at 1210.00 (see inset).  The target remains viable and can be bottom-fished if PCLN relapses Monday night or Tuesday morning, but my hunch is that you'll do better trying to get long via camouflage on the three-minute chart than looking to get short ahead of a possible washout. _______ UPDATE (March 25, 12:48 a.m. EDT): Yesterday's wild spasms left the stock little changed. My bias remains bullish, and the 5-minute chart looks like the best place to ferret out a 'camouflage' entry signal.

The 1303.60 correction target given here yesterday in an update still obtains, but any lower would indicate 1299.30, or perhaps even 1280.90. This sequence of Hidden Pivot supports is tied to successively higher points 'A' on the chart shown. Although you could try bottom-fishing at any one of them, the lowermost is the only one that might allow you to do so with a tight (i.e. four ticks) stop-loss rather than via camouflage.  _______ UPDATE (10:38 a.m. EDT): You have to drop down to the one-minute chart before today's bounce, such as it is, begins to look impressive. On the 'hourly', however,  price action merely looks like a struggle at 'p' to avoid an immediate washout to the 1280.90 target given above.  To better gauge bulls' mettle, we'll set the bar at 1327.00, which is what it would take to turn the 60-minute chart bullishly impulsive, albeit merely mildly so.

Sellers appear to have exhausted themselves at yesterday's lows, which came within a hair of the 3573.75 Hidden Pivot target shown (see inset). The bounce thus far is bullishly impulsive on the lesser charts, most immediately via a rally leg concluded at 3:36 p.m. EDT that exceeded a small external peak at 3618.50 on the 3-minute. The move projects to 3629.75, a Hidden Pivot resistance that would become an odds-on shot above the 3619.25 midpoint resistance. You may need to zoom all the way down to the 1-minute bars or less to find an 'external' peak to leverage a long entry opportunity. ______ UPDATE (10:33 a.m. EDT):  The futures easily exceeded the target flagged above but have gone into untradable, headless-chicken spasms in  both directions since the opening bell.  A key 'external' peak at 1357.00 recorded yesterday remains untouched, a challenge to bulls -- or perhaps a taunt.

DaBoyz rallied the futures in the second half of yesterday's session, but I don't expect it to go much further. The downdraft overshot a 'D' target for one; and for two, it generated a bearish impulse leg on the hourly chart (see inset). The most logical place for a head-fake to fail Tuesday morning would be at the 1855.75 midpoint pivot of the downtrending pattern. Accordingly, I'll recommend shorting near there via camouflage if an enticing opportunity unfolds. This implies the appearance of a bearish abc pattern on a chart of perhaps 3-minute degree or less. _______ UPDATE (10:27 a.m. EDT): The rally has shot past midpoint resistance but so far failed to surpass any external peaks on the hourly chart. That would take a  print at 1866.25, but we'll wait until it happens before we infer strength.  As has become all too typical for this vehicle, there have been virtually no 'camouflage' handholds for getting long OR short, only gratuitous spasms in both directions since the opening bell.