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-- Posted Wednesday, 26 February 2003 | Digg This Article
The only thing keeping stocks from falling hard right now, we would surmise, is a dearth of motivated sellers. As much could be said of the manic rallies that have alleviated the otherwise relentless descent of this bear market, now in its fourth year. Nearly all such rallies have resulted from short-squeezes that were brought on by a relative handful of buyers and a temporary absence of sellers. Yesterday’s session was more typical, beginning with an attempt to squeeze the bears on a quiet opening. But the effort quickly failed and by session’s end most issues were trading well below highs they’d achieved in the opening hour. Speaking as technicians, we must always be prepared for “technical” rallies. Such rallies can be triggered by a variety of factors, but a salient element is that selling will have temporarily exhausted itself. For, if not for “technical” rallies, what else could conceivably lift this market? We’ve been tracking stocks’ ups and downs diligently for more thirty years and are well aware of how nascent bull markets climb a “wall of worry.” But as we implied here a couple of days ago, the current wall of worry makes China’s Great Wall look like a Lego project. So on days when we turn on our monitor shortly after the opening and learn that the Dow is up, say, 40 points, we wonder what the dickens could be driving the buying, modest though it be? What, that is, could have caused share buyers to shrug off the prospect of war, skyrocketing fuel prices, feeble corporate profits, toxic levels of debt, rising unemployment, a falling dollar, terrorist threats and a dozen other macro killers? Perhaps, as CNBC commentators are wont to tell us, the buyers are optimistic that a quick victory over Iraq will allow things to return to “normal.” More likely, an easy victory over Iraq will force us to return our attention to some of the real problems that have been weighing on the stock market – most acutely the imminent implosion of a dollar-debt bubble that has been growing for more than two decades. [The + symbol means we have an open position, while $ means there is actionable advice.] Gold
APR GOLD (354.10): No change. The futures will need to close above a hidden pivot at 360.80 to develop sufficient torque for the next big leap – to 379.20, a more important hidden pivot.
+ GG (11.25): We hold 200 shares for an average 4.65. Goldcorp came nowhere near our 10.46 bid for 200 shares, but we can leave it in for a couple more days just in case. The stock needs to rally above 11.80 to get out of jeopardy over the near-term.  
DURBAN DEEP (NasdaqSC:DROOY) : Quote - News - Profile - Message Board - Website
+ DROOY (3.58): We own 600 shares for an average 4.38. DROOY fell to an intraday low within 3 cents of the 3.40 bottom we’d projected; then the stock rallied moderately into the close. It is mildly encouraging that DROOY was able to close above a hidden-pivot resistance at 3.55, but if it slides beneath 3.40, that would clinch a downside minimum of 3.19.
RGLD (20.01): Stochastic signs on the daily chart would turn bullish for the short-term if the stock can make just moderate upside progress today and tomorrow. How much progress? Our guess is that a close this week of 21.08 or higher would do the trick. Royal has suffered heavy technical damage over the last three weeks and would need to close above 23.73, a Fibonacci level, to imply it is seriously on the mend.  
DJIA (7806.98): The Dow’s failure early in the session to reach a 7943 pivot we’d flagged telegraphed the weakness that followed. If it spills into today, the first place we should look for support is 7766.03, a hidden pivot that you can bottom-fish on your own initiative, using the tightest possible stop. If that support is breached by more than 3-4 points, it would portend a likely fall to the next significant pivot, 7606.33. E-Mini S&Ps (827.75): The futures would need to rally above 841.25 to turn the short-term trend bullish. Otherwise, we should expect them to grope for support near two prior lows made in the last two weeks, 820 and 805. MAR BONDS (114.24): Just inches to go to the bullish target we’ve been, 115.07. If the futures trade more than two ticks above that price intraday, or close above it, we’d infer there is strength remaining to take them to 116.13. OEX (418.72): The OEX missed reaching our 426.15 rally target by less than half a point before turning south for the remainder of the session. It still needs to hurdle 426.15 to suggest it’s capable of a slightly more impressive feat – namely, a move up to a hidden pivot at 431.24, a hidden pivot. QQQ (24.22): We’d turn bullish, sort of, if the cubes can muster a rally above 24.94 in the first hour, or if they can close above that price. Our minimum upside target thereafter would be 25.80.
MAR NASDAQ 100 (973.50): We said the futures would need to exceed a hidden pivot at 1003.25 to show some pluck, but they stalled out yesterday at 1003.00. 1003.25 is still the number to beat, but if the March contract simply turns lower, it would probably seek support within the range 950-960.
-- Posted Wednesday, 26 February 2003 | Digg This Article
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