Rick Ackerman

The futures spent the whole day failing to 'actualize' the bullish impulse leg that had occurred on the opening bar.  Even adroitly opportunistic markets like this one need a catalyst to move higher, but yesterday there was no economic news of significance in sight -- only the passage of a $955B farm bill whose details are probably best left unscrutinized. Night owls can nonetheless attempt to leverage the pattern shown to get long, but I'd recommend waiting for a second, gratuitous point 'C'  low to form before you pounce. This being Tuesday, odds will tend to favor higher prices.

[A recent commentary here, Pass Line Bettors Finally Seven Out, drew a spirited response that included the post below. It is from Robert Moore, a forum regular and gold bull whose online profile describes him as “the obvious Pragmatist.” Mainly, says, Robert, its all about trying to protect one’s savings from theft-by-Government. RA] Regarding the following, commonly held scenarios expressed within this lively discussion:  1) Catastrophic deflation, debt diminishes and debt-derivatives implode, versus 2) hyperinflation, as the the money masters print feverishly to prevent #1 above; or my personal favorites: 3) one, followed by two, which is nearly always countered with:  4) “No, you idiot, it will be two, followed by one.” There is the obvious fifth option that everyone overlooks, and yet not one person in a thousand will be honest with themselves as to why they overlook it. The fifth option is the unfettered (i.e., unencumbered, free-market) revaluation of that most contentious of non life-critical physical assets (yes, I mean Gold). All the central banks need to do to restore faith is to get out of the way and let markets do what they have always done: clear themselves. The message that humanity is sending the Keynesian water-carriers is that “more debt will not restore confidence,” and I dare any of you to try and play God with me and declare that more debt will restore confidence. No Debt Will Go Unpaid There is a point where a burned lender will refuse to lend more, and there is likewise a point where a burdened borrower will refuse to accept any more burden. We (i.e., humanity) have passed that event-horizon. It is in the rear view mirror. The debts must be paid, forgiven, or defaulted, in order to start the process of restoring confidence. Period. The only reason this

The markets are so serene Sunday night they could almost make one want to cuddle up with them for some playful fondling. However, when trading begins Monday morning, we should expect the sleazy, nasty, crooked game to start up again, with stocks headed higher no matter what the news and irrespective of whatever geopolitical crisis might be brewing in the flyover nations of the world. Is America great, or what?|

Friday's price action produced conflicting signals. Although our 14899 downside target had been decisively exceeded a dy earlier, this was followed by a very robust, impulsive rally.  On balance, we should defer to bulls when stocks start to trade Monday morning, and traders should go with the bullish flow. However, if rallies of lesser degree start to fall shy of their 'D' targets, it would cast doubt on the integrity of the melt-up begun from the lows.

Nasty as Friday's plunge may have seemed, it left intact two closely spaced, bullish targets we've been using for the last week or so as a minimum upside objective.  To simplify, we'll remain focused on the lower one, 1426.60, since any rally that gets there is likely to hit the higher target (see archive) at 1427.00 as well.  We'll have a better idea of whether bulls are merely biding their time or, alternatively, seriously fatigued once the down-leg shown has generated a 'c-d' follow-through. If it's no worse than the pause that refreshes, expect the corrective phase to reverse from a 'p' midpoint resembling the hypothetical one sketched.

When Friday's rally had run its course, the S&Ps had just inches remaining to reach the minimum upside target at 1645.75 shown in the chart. The futures had nonetheless created a promising impulse leg with a 1650.00 target that should come easilyy as the new week begins. Catching a ride will likely be difficult, however, since the only prior peak we've got for purposes of leveraging an entry trigger is the obvious one at 1645.75. Breakout artists will be using it for the same purpose, and so I am not recommending the trade except to camouflageurs and/or night owls who have been around the block.

The dirtballs who ply the night shift appear to have taken a few steps back in the wake of yesterday's nasty short-squeeze. The most likely way to resolve this standoff between cagey buyers and reluctant sellers is to open shares on a gap so big that even bears desperate to cover short positions will think twice about the price.

Shorts were on the ropes at Thursday's close and unlikely to escape a bludgeoning when stocks begin to trade this morning.  Under the circumstances there is little to predict, and perhaps even to trade -- especially since the pullback from yesterday's high has been micro-shallow so far (see inset).

My bear market target at 135^05 is well below these levels, but we're still on the lookout for signs that the Fed will step in -- as they always have in recent years -- to reverse price erosion before investors hit the panic button. Signs are ever-so-mildly bullish with the impulse leg generated yesterday on the hourly chart. The pullback shown low may not hold, but if does we should look for a thrust to p=142^04 at a minimum, or to D=143^07 if any higher.  The move could conceivably set up an appealing bull play for camo traders once the entry signal is tripped, but you may need to zoom down to the 15-minute chart or less to keep risk down to a four-tick minimum.