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Wednesday, February 10               Published daily Receive a free trade each day
The Morning Line

Extra! Extra! World Peace Breaks Out!!

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Tuesday’s nervous price action should be considered indicative of the stock market in its ‘resting’ state, but watch out if the broad averages grow quiet again, since that will be signaling a big move. DaBoyz are always looking for news to push stocks one way or the other, but with Q4 earnings done with, any bullish headlines would have to be of the world-peace-breaks-out, cancer-cure-found variety. Fat chance, eh?

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$CLH16 – March Crude (Last:28.33)

EST

Crude chart with insetSubscribers who trade crude oil should check out my chat room posts from Tuesday, starting at 13:39. Earlier, with the futures trading around 28.75, we were looking for a tradable bottom at exactly 28.22, a very promising Hidden Pivot target. In the actual event, the March futures breached the pivot decisively, eventually bottoming at 27.74. But look at how we still managed to nail the low for trading purposes, using the 5-second bar chart to locate the bullish turn when it finally came. I signaled it in the chat room within four cents of the actual low, then posted a long-entry signal moments later when the trade triggered at 27.79. The initial run-up hit 28.69, implying one could have made a profit of as much as $900 per contract in just 24 minutes. If you’re interested in seeing exactly how this was done, I’d recommend tracking my chat-room posts against the futures’ real-time ups and downs on the very lesser charts. You will need an application that can reconstruct a 5-second bar chart like the one shown to follow the final moments that led up to the trade.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$ESH16 – March E-Mini S&P (Last:1846.25)

EST

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$OIL – Goldman Crude Oil ETF (Last:4.72)

EST

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$GCJ16 – April Gold (Last:1189.40)

EST

With each new peakMonday’s surge did everything we’d asked of April Gold and more, raising the odds that this rally is more than the usual Whoopee Cushion effusion that has repeatedly teased bulls to the limits of their patience for the last four years. At the intraday high, the futures had demolished a daunting resistance at 1191.90, where April Gold peaked precipitously in mid-October. That leaves only a lesser peak at 1232.30 (see inset) and January 2015’s ‘Matterhorn’ at  1308.00 as impediments to the resumption of the long-term bull market. If the rally, which is still uncorrected on the weekly chart, continues without a significant pause, surpassing both of those peaks without taking a breather, I’d infer that the bear market is over.  In the meantime, because the uptrend is becoming overextended, I’ll forego a night-in-advance trading strategy, since getting aboard this late in the rally is going to be tricky no matter how we attempt it. I do not mean to suggest, however, that it could not get much more overbought, and go significantly higher, before buyers take a rest._______UPDATE (5:30 p.m.): So far, so good. We keep expecting gold to go kamikaze, but the rally continues to hold up surprisingly well. Tuesday’s so-far shallow correction portends an imminent thrust to as high as 1222.80 over the near term. That’s assuming the so-far retracement low at 1185.90 holds and that buyers have the wattage to push past midpoint resistance at 1204.40. A pullback to that number after it has been exceeded for a few bars by about $3.50 would set up a ‘mechanical’ buying opportunity, stop 1198.20.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$LNKD – LinkedIn Corp. (Last:108.38)

EST

Another Silicon Valley scamThe unicorn stocks have been falling so steeply lately that you can practically hear the hot air coming out of real estate in Silicon Valley and San Francisco.  LinkedIn, a cloud-based business with an opulent campus in Mountain View, ranks high on the list of Nasdaq hotties with inflated share values based more on the outrageous greed, stupidity and hubris of investors than on any fundamentals.  For perspective, however, it should be noted that LNKD’s core business, helping professionals network their skill sets, has far greater economic usefulness, perforce, than Twitter, which as far as one can tell was designed to allow Kim Kardashian, Justin Bieber and other world-class narcissists to communicate with their fans at all hours of the day and night.

That LinkedIn would eventually run into earnings problems should have been apparent to LNKD users, if not to clamorous investors, years ago.  Here is a company, after all, that grows its subscriber list virally by filching names from users’ email clients. Fifty years ago, Stanley Goldblum, the criminal mastermind behind the Equity Funding scandal, went to prison for a similar scheme, although his suspiciously large mailing list was mostly fabricated rather than stolen. LinkedIn has been almost as brazen, sending users frequent email invitations to link to people in their Outlook contacts folder who have been dead for ten years. That this tactic raised nary a red flag on Wall Street is testimony to the stupidity of the supposedly smart money.

On Friday, the chickens came home to roost when LNKD shares plummeted to 102.81 after settling a day earlier at 192.28. The company’s glum guidance for 2016 laid an egg with Wall Street’s best and brightest, who should be embarrassed for not seeing it coming. Don’t look for a quick recovery either, since, like Yahoo, their business model has utterly failed. Maybe the two companies can join forces and produce virtual widgets for the masses?  In any event, the technical picture suggests LNKD may have significantly farther to fall. Although my proprietary Hidden Pivot analysis provides no specific target at the moment, it seems logical to infer that the stock will grope its way down to at least $90 before finding traction — or even to $60 if 2012’s lows don’t hold. The obligatory bounce in the meantime is going to be a doozey, so we’ll be looking to trade both sides of the market.  Tune to the chat room for guidance in real time if you’re interested.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$USH16 – March T-Bonds (Last:166^03)

EST

If Bond bulls push pastMuch as we’d wanted a dip down to 157^03 so that we could get aboard for cheap, it was not to be. The pattern shown makes clear, however, that there’s still plenty of opportunity for bulls — most immediately, to the 164^23 target shown.  I’ll suggest getting long with a ‘mechanical’ bid at p=161^15 once that Hidden Pivot has been exceeded by at least half a point for three consecutive bars. The implied stop loss, a third of the approximately 3.25 points we stand to make if D is reached, should be placed at 160^07 upon entering the trade. _______ UPDATE (Feb 3, 2:52 a.m. EST): Tuesday’s explosive rally brought the futures to within less than a point of the 164^23 target we’ve been using to keep in step with the bull market.  I expect a pause there, but my long-term outlook remains extremely bullish, with a prediction that rates on the 30-year will fall as low as 1.64%.  That would be half of the recent, corrective high._______ UPDATE (February 8, 9:50 p.m.): Bulls made short work of an ostensibly daunting target at 164^23, suggesting there is plenty of buying power remaining. However, the futures are due for a well-earned rest, so be prepared for the rally to flame out near these levels. They are currently stalled at the 166^29 target of the pattern shown, but any higher would indicate more upside to 167^22, a Hidden Pivot calculated by sliding ‘A’ down a notch, to 158^06. I seriously doubt the futures will push past 167^22 without pulling back first, possibly substantially. If they surprise by crushing the pivot, however, we can infer that it is a bullish tsunami that is driving this phase of the bull market.______UPDATE (February 9, 6:50 p.m.): The futures spiked to 167^09, less than half-a-point from my target, but bulls may not be done. The target remains valid in any case, and a decisive breach to the upside would imply that another significant pop may be imminent. It would also imply that any pullback intraday should be regarded as a buying opportunity.

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$AMZN – Amazon (Last:482.07)

EST

New AMZN targetsThe usual bunch of thimble-riggers had AMZN down a hundred points on less-than-earth-shattering news out after the close. The company reported record earnings that evidently fell shy of estimates.  Never mind that those who are paid princely sums to do the estimating are the proverbial thousand chimpanzees at their typewriters, one of whom will eventually type Hamlet. And no matter that AMZN is one of the few high-flying companies that is actually building a commanding brick-and-mortar empire in retail, as opposed to a digital chimera like Twitter, LinkedIn or Uber. If there is anything positive to say about AMZN’s headless-chicken hysterics, it is that the earnings evidently were not leaked ahead of the announcement. We know this because the stock rallied 55 points, or nearly ten percent, in the hours preceding the news.  From a technical standpoint, AMZN now looks likely to fall to at least 526.11, the Hidden Pivot shown; or even to 488.80 if it takes out the higher number. This matters a great deal, since AMZN is a key bellwether, if not THE bellwether stock, and because it is one of the last stocks left in a dwindling group of world-beaters that is capable of leading the stock market higher. _______UPDATE (February 4, 12:25 a.m.): Don’t look now, but AMZN crushed the 526.11 downside target with yesterday’s sensational plunge. It opens a path to as low as 488.80, although it would be premature to infer at this point that it’s a done deal.  Let’s see whether whatever minor retracements that are coming can get past midpoint resistance pivots. Tightly stopped shorts are encouraged from ‘p’ regardless._______ UPDATE (February 8, 12:59 a.m.): This morning’s plunge crushed the 488 pivot, opening a path to the new target shown, p2=449.40;  or if any lower, D=419.69._______UPDATE (February 9, 6:55 p.m.): Bulls are struggling for traction, but they’ll need to push past a minor peak from last Friday at 512.45 to generate a bullish impulse leg on the hourly chart. A pullback from just above that number should be regarded as a buying opportunity.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$SLW – Silver Wheaton (Last:13.41)

EST

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$+CDH16 – March Loonie (Last:0.7261)

EST

Crude likely to bounceIn the Rick’s Pick’s forum, long-time contributor Cam Fitzgerald notes a high correlation between the Canadian dollar and the price of oil. Cam thinks a relief rally in crude is imminent because the loonie is closing on a potentially important bear-market target.  I agree that the Canadian buck is about to turn, and it does seem logical that this would occur in the context of rising commodity prices, since the currency’s value is so closely tied to Canada’s resource-based economy. My target differs somewhat from Cam’s, and my bear-market projection for crude is in the low $20s, well beneath current levels of around $29 a barrel. But because crude is overdue for a ‘dead-cat’ bounce, I’m going to suggest that shorts in both the loonie and oil reverse their positions here, and that traders eager to initiate new positions in the former do so near the 0.6830 Hidden Pivot target shown. The least risky way to get on board would be to use the ‘camouflage’ strategy that is intrinsic to the Hidden Pivot Method. If you don’t fully understand the tactic, you need only inquire about it in the chat room.  Given the clarity of the Hidden Pivot pattern shown, it is difficult for me to imagine the loonie going significantly lower without first taking a big bounce from very near these levels. _______ UPDATE (10:18 a.m. EST): The futures have gone ballistic this morning after bottoming at 0.6809, just 21 ticks from our target. Now let’s see if they can hold onto the gains. Since there were reports in the chat room of longs being initiated near the low, I’ll establish a tracking position. Cover half of the position here, around 0.6890. Assuming four contracts from 0.6830, two remain with a profit-adjusted cost basis of 0.6770. ______UPDATE (9:55 p.m. EST): The position is off to an excellent start, with a rally that has lifted the futures nearly a penny above the acquisition price. Offer another contract to close at 0.6980 against a stop-loss at 0.6799 for the two contracts that remain. _______UPDATE (January 21, 11:46 a.m.): The long position established an inch from yesterday’s low is showing a theoretical gain right now of about $4500 per contract. I would like to hear from anyone who is trading this vehicle. The gain has been adjusted to reflect a partial profit after exiting two of four contracts yesterday at 0.6890; and exiting a third contract this morning, as recommended above, at 0.6980. Our effective cost basis for the contract that remains is 0.6560. _______ UPDATE (January 25): To protect the gains racked up thus far, I’ll suggest tying the position to an ‘impulsive stop-loss’ on the 60-minute chart. For the moment, that would mean exiting on a plunge today that touches 0.6876._______ UPDATE (February 2, 1:59 a.m.): A stall so far precisely at p2=0.7188 implies the loonie will hit D=0.7257 if and when it gets past it. Covered write the futures contract with just-in-the-money call options to hedge this one.  Here are the coordinates, on the 30-minute chart, for the relevant pattern: A=0.6089 (1/20); B=0.7085  (1/22); and C=0.6981._______ UPDATE (February 4, 12:48 a.m. EST): To keep things simple, I’m recommending an exit from the long position acquired by subscribers very near January’s 0.6809 bottom. The trade would have produced a profit of about $7000 per contract in a little more than two weeks.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$+TLT – Lehman Bond ETF (Last:129.00)

EST

PUsh past p would makeFriday’s rally was so promising that I’ve switched to a more expansive view of the long-term bull market for perspective. (The bull looks even more impressive when viewed on the monthly chart, which is shown here as an inset.) Most immediately, buyers will need to drive this vehicle past the midpoint pivot (p) at 124.77 (see chart) to suggest they’ve got enough power to achieve the D target at 131.53. This will be a key test, since a robust bull market tends to make short work of Hidden Pivot ‘midpoint’ resistances if there’s staying power behind the charge.  For trading purposes, our odds will improve if we  buy a pullback to p (stop  ) after this vehicle has exceeded it by at least 2.50 points._______ UPDATE (December 23, 9:49 p.m.): Use the pattern shown to trade this vehicle on Thursday, since the 120.18 target looks like a high-odds spot for this correction to end. You can bottom-fish with a 120.23 bid, stop 120.14._______UPDATE December 30, 9:26 p.m.): I suggested loosening the stop-loss in the chat room Tuesday morning when TLT approached my target.  Anyone still aboard?  If so, please let me know in the chat room and I’ll establish a tracking position. It would take a rally to 120.95 to give bulls a comfort cushion. ______UPDATE (December 31, 2015): Although my target did not catch the bottom exactly, it appears as though a good bottom is in.  Since I’ve heard from subscribers who opened long position, I’ll establish a tracking position of 400 shares. For now, offer 200 to exit at 120.95. The order should be held o-c-o with an impulsive stop-loss on the entire position.  At the moment, using the hourly chart, the stop-loss would trigger at  119.97. ________ UPDATE (January 4, 9:58 a.m.): We hold 200 shares with a profit-adjusted cost basis of 119.51. For now, use a stop-loss at 119.66. _______UPDATE (January 11, 9:06 p.m.): You go, girl! _______UPDATE (January 13, 9:15 p.m.):  Take a partial profit by closing out 100 shares at current levels.  Please let me know what you’ve done via email or in the chat room so that I can adjust our cost basis.______ UPDATE (January 19, 8:44 p.m.): We hold a round lot with a profit-adjusted cost basis of 114.02. We’re swinging for the fences on this trade, so do nothing for now. ______UPDATE (January 20, 10:38 p.m.): At today’s highs, our position was showing a theoretical profit of  $1390 for each round lot held. Do nothing further, since we are still swinging for the fences. _______ UPDATE (January 25): On the hourly chart, TLT is working on a 129.10 target. It would become a high-odds bet if buyers can push above 126.81, the midpoint Hidden Pivot of the pattern shown. I’ll suggest putting on a covered write, using 129-strike calls at least two weeks out if TLT gets within 15 cents of the target. _______UPDATE (Feb 3, 2:46 a.m.): For tracking purposes, I’ll record a sale at 1.60, basis the Feb 19 129 calls. That’s 59 cents off the intraday high with TLT trading up to 129.94 yesterday.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$TWTR – Twitter (Last:31.15)

EST

Look for TWTR rallyI’ve never been able to figure out Twitter’s appeal, other than to those who want to keep up with the Kardashians, Justin Bieber, Rihanna and other A-list narcissists. Investors would seem to back me up on this, since the stock has been falling for nearly two years — from an all-time high near $75 to a bear market low in August of $21. Lately, however, bulls have had a resurgence, aided by a PR blitz that included some nicely timed headlines. For one, the company plans to lay off 8% of its employees. That kind of stuff is always guaranteed to get investors high-fiving on Wall Street. Also, Jack Dorsey, one of Twitter’s four co-founders, has been re-installed as CEO in a desperate attempt to turn things around. The company has yet to make a profit, not that that’s ever a concern on Sand Hill Road, but maybe Dorsey can pull a “Yahoo” and find a venture-stage acquisition to pump up Twitter’s bottom line? The most recent news, however, could turn out to be the kiss of death: Steve Ballmer owns a 4% stake in Twitter.  Given Ballmer’s dismal track record for acquisitions while CEO of Microsoft, Twitter might as well have the boardroom backing of Nicholas Cage or Wesley Snipes.

As you might expect, Wall Street’s hypemeisters, working hand-in-hand with the usual suck-ups and ninnies in the news media, have leveraged the Ballmer story to drive short-covering that has pushed TWTR 30% higher in the last two weeks. These guys are so good they could move $500,000 condos in Syria. So how far will Twitter’s gaseous ascent go before the stock resumes its fall to the 18.26 target shown? My corrective-rally target is 36.00, assuming TWTR can get past a ‘Hidden Pivot midpoint resistance’ at 32.42. The stock would become a buy at that point, but with the goal of plowing one’s gains back into a short position, generously stopped, from $36. Twitter’s surge to those heights would amount to a 71% gain off the August low. For the keister bandits who will have stage managed the move, it would be a fine piece of work — the transformation of the proverbial sow’s ear into a million silk purses. _______ UPDATE (January 14, 9:55 a.m. EST): Twitter is plummeting this morning, having crashed the 18.26 target.  Next stop, perhaps on the way to zero, is 14.06, a target that comes from the weekly chart, where A= 38.82 on 7/17. Based on personal experience with Twitter, I’ve always thought this stock had the potential to go to zero. Twitter may work for Justin Bieber and his fans, but not for businesses that want to grow._______ UPDATE (January 20, 10:42 p.m.): DaBoyz got a grip on bears’ cahones today and short-squeezed the stock for all it was worth. It won’t prevent the stock from falling toward well-deserved oblivion, however.  In the meantime, the 14.06 target will remain valid unless the con-men who are TWTR’s loyal sponsors can goose it to…$32.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.


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The laser-like accuracy of Rick Ackerman’s forecasts is well known in the trading world, where his Hidden Pivot Method has achieved cult status. Rick’s proprietary trading/forecasting system is easy to learn, probably because he majored in English, not rocket science. Just one simple but powerful trick -- managing the risk of an ongoing trade with stop-losses based on ‘impulse legs’ – can be grasped in three minutes and put to profitable use immediately. Quite a few of his students will tell you that using ‘impulsive stops’ has paid for the course many times over.

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