-- Posted Thursday, 31 August 2006 | Digg This Article | Source: GoldSeek.com
Thursday, August 31, 2006
For investors who’d rather be smart than lucky
I tried lowering the bar yesterday to see if it might help buyers meet our very modest rally expectations, but even that didn’t work. We were looking for the Mini-S&P to choke, wheeze, gasp or otherwise struggle its way up to 1309,00, a Hidden Pivot that promised to reward shorts with a quick payoff and relatively little risk. It lay a mere point-and-a-half above the previous day’s high and just 4.25 point above the most recent settlement price, so we weren’t really asking for much. Alas, the futures topped at exactly 1308.75, providing a demonstration of coitus interruptus (or “getting off at Redfern,” as our subscribers from Oz might say) that will have left traders lusting for yet more abuse when stocks open this morning. sinuous
From a Hidden Pivot perspective, the broad average weren’t supposed to just noodle around yesterday. After all, they’d received a good goosing from panicky shorts the previous day, generating the kind of impulse leg that usually begets an equally impressive follow-through. Not this time
though, and we can only infer from the market’s ensuing, nervous scuddle sideways that traders weren’t quite short enough to deliver the push it will take to knock stocks from their coma-inducing range.
Don’t Blame Bears
Don’t blame the bears, though, since the ones who have been around for a while know in their minds, if not in their hearts, that any market as tempting to short as this one is out to dismember risk-takers. “You can’t be short this market” is what I keep hearing from guys who share my colossal skepticism toward Dow 11000. With recession odds growing so compelling that even some of CNBC’s world-class permabulls might think twice about betting the “pass” line, we should expect the stock market to be dropping like a stone. It is not falling, however, and we can only counsel patience to those who believe a quick thousand-point drop in the Dow would be as right as rain.
-- Posted Thursday, 31 August 2006 | Digg This Article | Source: GoldSeek.com
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