GS

I'm not buying any of this -- literally -- since it is coming off a 133.81 low that lies almost $2 beneath  the lowest low I could have projected using the hourly chart. That suggests sellers will soon resume control, even if it  would only take a print today at 144.31 to temporarily cede the advantage to the madmen.  Incidentally, a pullback from just above 144.31 could provide camouflage for traders who want to jump on the stock for a presumptive short ride north.

We've been using a downside target of 135.35, but I am now recommending bottom-fishing if and when Goldman falls to another Hidden Pivot at 137.69.  I'll update with more detailed instructions following a print within $1 of that target, so check back if you're interested.  The target would be hit, ideally, following a slow grind lower, but if it comes in conjunction with a stock market avalanche, you should back away. _______ UPDATE (2:40 p.m. EDT):  The stock has traded down to 137.55 so far.  For your guidance I will establish a tracking position of 400 shares.  A 137.44 stop-loss is advised for now, and you should take profits on half if GS trades up to 138.69. _______ FURTHER UPDATE: The stock finally bottomed at 136.60, stopping us out for a $100 trading loss -- but also warning that, despite the  nearly $2 bounce from the lows, sellers are not yet done with Goldman for the moment.

If Goldman drifts lower over the next 5-7 days, we'll look to bottom-fish down at 136.11, the lowest Hidden Pivot target that can be derived from the intraday charts. If I can come up with a way to initiate the trade using a limit bid for some near-the-money call options, I'll feature the trade as a Pick of the Day for all. _______ UPDATE (May 16):  Scratch Goldman from the list of stocks we've been watching lately, since it has become too, too boring to deserve our time and attention. My minimum downside objective is now 135.35, and I'll set an alert there, since the support will be worth bottom-fishing if it's ever reached -- which it will be.

Propped by nervous shorts who evidently lack not only confidence but perhaps competence, Goldman held like the proverbial rock yesterday.  Too bad  most of those who have remained short will not make it to the promised land -- a 135.35 Hidden Pivot support broached here earlier.  That might not be the worst case, either, since there's another equally important Hidden Pivot support at 124.79.   It could be over for Goldman, since, as a result of the civil fraud action brought against the firm by the government -- and possible criminal charges to come --  they will remain eminently sue-able till the cows come home.

Although the 151.00 Hidden Pivot seems to have arrested Goldman's so-far 35-point plunge, the stock is not yet out of the woods. The minor uptrend projects to 159.76, or perhaps 160.85 if any higher, but we should like to see a print exceeding 169.00 before we assume that the worst is behind.

We’ve featured both bullish and bearish headlines here in recent weeks, so it’s time to clarify the outlook lest readers become confused. In brief, we are looking for an approximately 1400-point rally in the Dow Industrials this summer, but we’re prepared to turn bearish if a change in stock market’s technical condition warrants it (see chart below).  So far, we’re giving the bulls the benefit of the doubt based on a purely mechanical reading of the charts. But we also believe that Europe’s financial crisis is starting to spin out of control, much as America’s banking crisis did when Lehman Brothers went under. In Europe there is fear now, and even rioting in Greece, because no bailout measure tried so far has put deep anxieties to rest. Panic seems unavoidable at some point, and it could come in a day, a week, or a month, but probably sooner rather than later. Regarding our bullish call on the stock market, let us say up front that it goes sharply against our instincts and every shred of logic that we possess. Permabears do not come easily to the notion that stocks could rally so powerfully amidst a patently fraudulent economic recovery – a recovery that has touched almost no one we know and which, even at a very low level, cannot conceivably be sustained. Even so, putting our opinions and instincts aside, we’ve learned to simply trust the charts whenever there are doubts. Goldman Resists Tide This we have done, at least for the moment. As the week began, our technical runes told us it might not be a bad time to venture out on the limb with an especially bullish prediction. Thus, the headline “So Bullish on Stocks That We Feel Guilty”.  The commentary went on to explain why we were

Goldman did not get clobbered yesterday by the selling that brought the broad averages down. Instead, it bottomed just 85 cents below a key Hidden Pivot support at 151.00 that I'd identified earlier. It will of course take more than that to turn the stock market around, but we shouldn't dismiss the psychological importance of this stock's resisting the bearish tide -- especially when the company itself was getting clobbered by an inquisition on Capitol Hill as stocks were dropping.  Some subscribers evidently made hay with the forecast, although it took guts to ignore what was going on elsewhere in the market.  Looking just ahead, the stock will need to hit 157.96 to further distance itself from jeopardy. The trend was down at the close, and GS appeared to be holding on by a thread.

It is entirely conceivable that the SEC's lawsuit will be the beginning of the end for Goldman Sachs & Co., since class-action suits likely to follow are potentially endless.  Meanwhile, I am holding to my "hula prediction" that the stock eventually will trade under $30, but I must mention that, at the moment, GS does not look like a disaster from a Hidden Pivot perspective.  See for yourself, since, as the daily chart makes clear, the stock's steep dive this week failed to create a bullish impulse leg.  This fact amazed me when I first confronted it, but I cannot simply ignore the evidence just because I believe deep down that the company is a dead duck.  There is no impulse leg here (i.e., on the daily chart) because the stock had two good runs at the #2 external low but couldn't crack it.  The retracement rally has since gone far enough to produce a legitimate B-C leg (relative to one-off A=182.01, 15m),  and we'll be watching closely to see whether the next bout of weakness cracks the midpoint support of the  ABC pattern thereof.

After failing to seize the opportunity last week, Goldman has receded back into doubt, perhaps dooming the broad averages to purgatory in the absence of bank-stock leadership.  The nearest downside target of consequence lies at 167.88.  That's a Hidden Pivot support, and although it's too close to a key low at 168.00 recorded on March 9 to be perfectly useful for bottom-fishing, we might nevertheless infer from its breach that the recent weakness in this once world-beating stock is likely to persist.