Monday, June 27               Published daily Receive a free trade each day
The Morning Line

A Different View of What Brexit Means

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Pundits, pols, investors and pollsters got it very wrong on Brexit, trusting the oddsmakers at Ladbrokes to handicap the outcome. Now let’s see how well these geniuses do ferreting out evidence in the months and years ahead that Britain’s exit from the EU has had much of an impact on the economic world, where it matters. Obama, ever the unregenerate jerk, threatened to move Britain to the back of the queue on trade deals with the U.S.  Yeah, sure, Mr. President: Whip them, kick them, beat them, lock out their luxury cars and pharmaceutical products with a vindictive stroke of your pen. In the meantime, we await a sign, any sign, that Brexit has been the disaster that virtually every scare-mongering newspaper in the world proclaimed it to be over the weekend. Until tangible evidence of this surfaces — and I very strongly doubt that it will — don’t expect Brexit fallout to hold down the world’s stock markets as they continue to gorge themselves on easy money from the central banks.

The most interesting thing about the Brexit vote is that it has significantly shortened the odds of a Trump victory in November. That’s assuming he’s nominated, of course, and despite the fact that he is the hands-down worst gamble that an increasingly desperate American electorate has taken since they lifted Obama from well-earned obscurity in 2008. It could not be clearer, however, that Trump and Brexit are perfectly interchangeable for purposes of measuring the growing rage of voters everywhere. The pundits, pollsters, EU bureaucrats, pols and news media-hacks who blew the call on Brexit will malign Trump relentlessly in the months ahead, and they will tell us with the usual pseudo-scientific certitude that Hillary is going to win (assuming she’s not indicted first). But they will be as wrong about that as they were about Brexit — about pretty much everything that the rabble they would presume to instruct hold dear these days.

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$USU16 – Sep T-Bonds (Last:171^28)

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GCQ16 – August Gold (Last:1319.10)

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ESU16 – September E-Mini S&P (Last:2018.25)

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Friday's breach of pThe pattern shown replicates one that we used Friday to get a precise read on price action in the E-Mini Dow as it worked its way lower. Although the patterns differ somewhat, they suggest that both vehicles still have a ways to fall if they breach their respective red-line supports Sunday night. That’s a midpoint Hidden Pivot, and although the E-Mini S&P dipped slightly below it at the close, the breach was not quite sufficient for us to infer that further slippage to p2=1996.31, or 1973.50 if any lower, is a done deal. Both of these levels, as well as the green line, should work for purposes of initiating ‘mechanical’ shorts or bottom-fishing, but you could cut the entry risk considerably by executing the trades using ‘camouflage’ on charts of three-minute degree or less. Check out my chat room posts from Friday, beginning at 10:17 a.m., if you want to see how very accurate and useful Hidden Pivot swing points can be, even when stocks are plummeting and a little crazed.

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$+TLT – Lehman Bond ETF (Last:139.11)

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Subscribers used pivot to buy TLTThe 133.22 bid I’d advised caught Wednesday’s low exactly to-the-penny. Several subscribers reported getting aboard, so I’m adding 400 shares to our long-term position. Averaging them together yields a new cost basis of 123.77.  As noted here earlier, this trade, initiated with a simple limit-order bid, was explicitly designed for newbies and lurkers who are understandably eager to pay for their Rick’s Picks subscription and the Hidden Pivot Webinar with trading profits. If you did not take the trade, please note: No gambit that I offer in the future will be easier or more straightforward than this one.  Moving forward, we’ll keep all 800 shares, with no stop-loss, for a swing at the fences. If you hold only the 400 shares that was to have been acquired Wednesday, I’d suggest using a break-even stop-loss for the time being, since Brexit-induced hysteria could play havoc with this vehicle for the next day or two. _______ UPDATE (June 23, 7:51 p.m. EDT): The stop-loss for those who initiated new positions at 133.22 would have been hit, but I have yet to hear from any subscribers concerning the amount of their loss, which would go against our cost basis if and when we get aboard. We’ll try again in any case, but not until after the impact of the Brexit vote has been absorbed by investors. _______ UPDATE (June 27, 10:52 a.m): My mistake: We held only 100 shares from the original position. Thus, adding the 400 shares bought by subscribers a few pennies off last week’s low yields a cost basis of 129.46 for a 500-share tracking position.  At a current price of 139.11, that equates to a gain on paper of $4,825.

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$GDX – Gold Miners ETF (Last:25.48)

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$BPU16 – Sep British Pound (Last:1.4200)

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If p gives wayBrexit talk in the Rick’s Picks chat room on Wednesday suggested there’s a wide gulf between bulls and bears where the British pound is concerned. The chart shown puts the argument in a technical perspective that should offer clarity to both camps. Notice that the futures, shown here via the continuous monthly CME contract, bounced very precisely from the midpoint Hidden Pivot, as we might have anticipated. That said, we cannot predict at this point whether the bounce will sputter out in a matter of days or weeks, or if instead the futures will soon embark on a multiyear rally. My gut feeling is that the bounce from so important a Hidden Pivot support has not been nearly as robust as we might have expected, and that as a result, the futures will ultimately crack 1.3893. If so, we could confidently expect the downtrend to continue to 1.2248, the secondary Hidden Pivot, and to bounce as precisely from it as it has from 1.3893.  If that support were to fail as well, the 1.0602 Hidden Pivot target would be in play as a possible bear market low.

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

$+SNIPF – Snipp Interactive (Last:0.1829)

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SNIPF's diveSnipp shares dove anew Tuesday on news of disappointing earnings for the first quarter of 2016. It is most perplexing to me that a company that has been winning new business with so many blue-chip clients cannot turn a profit. The inescapable conclusion is that Snipp Inc. has been poorly managed.  Talk with the CEO, Atul Sabharwal, however, and you will come away convinced that he knows what he is doing and that he will eventually bring Snipp’s bloated operating costs under control.

On the other hand, it is hardly reassuring that Snipp put so many shares in the hands of Canaccord via a “bought sale” arranged last year. One might surmise that, ever since, the Canadian investment firm and its close friends have been unloading Snipp shares into every rally. I continue to hold a third of my original position nonetheless, since, at least from a marketing standpoint, Mr. Sabharwal seems to me like a highly capable innovator.  If it were otherwise, the company would not be winning new business with so many blue-chip multinational firms.

From a technical perspective, the stock’s slippage beneath a key ‘midpoint Hidden pivot’ at 0.1832 leaves it vulnerable to a fall to 0.1298 over the near term (i.e., within 3-4 weeks). Worst case if that ‘secondary’ pivot should fail would be 0.0764. As noted above, I will continue to hold Snipp shares speculatively because I am unable to imagine the company going belly-up. If it doesn’t, Snipp appears to have laid the groundwork for solid growth and strong profitability somewhere down the road.  Snipp itself is optimistic this will happen, for reasons that are spelled out in the latest earnings report. Click here to access it.

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

$DUST – 3x Gold Miner Bear (Last:10.12)

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Further push by DUSTAs last week ended, DUST appeared all but certain to continue down to the 0.80 bear-market target shown. The pattern that produced it is ‘textbook’ beautiful and has been confirmed by the stock’s precise deference to the midpoint (p) and secondary (p2) Hidden Pivots.  Although ‘mechanical’ shorts from both of these levels were possible in theory, in actuality DUST failed by pennies to rally back up to them. Under the circumstances, only a ‘camouflage’ entry could have worked, and even then it would have required considerable diligence and rapt attention. Traders should note that if DUST is about to turn up from 0.80 as I expect, that would correspond to a top of at least short-term importance in the mining stocks. In any event, we’ll plan on bottom-fishing this brick with an 0.83 bid for 800 shares, stop 0.72, good till canceled. The theoretical risk here, including commissions, is about $100.  Options on this vehicle are sporting implied volatilities in the cosmos, with ridiculously wide spreads to boot, so I am strongly recommending against buying calls instead of stock. _______ UPDATE (May 5, 2:05 a.m.): The so-far 3-day rally looks mildly promising, but it would have to surpass April 14’s 2.51 peak to turn the daily chart bullishly impulsive. Even the ‘hourly’ would need to hit 2.06 to accomplish this. _______ UPDATE (May 18, 10:29 a.m.): Here’s an interesting discussion of why 3x ETFs tend to fall to zero over the long haul. The discussion gets somewhat arcane and, amazingly, is inconclusive as to whether these vehicles actually decay. I side with the contango/decay trolls, although the author’s point, that there are far more potential negative outcomes than positive, at least partially explains why the zero axis is so strongly magnetic for 3x vehicles. This is all relates to my analysis of DUST, which has just reverse-split 10-to-1 because it was closing on zero.  Accordingly, I’ve substituted a new chart that adjusts the downside target from 0.80 to 8.00. I have absolutely no doubt that it will be reached, and that it will generate a precisely tradable bounce._______  UPDATE (11:10 p.m.): Wednesday’s ballistic rally was strongly impulsive on the hourly chart, but mining-share bears should wait for a further push above the two labeled peaks before breaking out the bubbly. If that should happens with no b-c pullback along the way, it would be very bullish indeed for DUST — and therefore bearish for mining shares.  _______UPDATE (May 22, 1:38 a.m.): Last Thursday’s rally to 16.96 was mildly impulsive and points to as high as 18.73 over the near term, provided p=16.40 is exceeded on Monday or Tuesday and 14.07 is not exceeded to the downside first.  _______ UPDATE (May 31):  The stock popped to within 0.06 points of the 18.73 target noted above but has flat-lined since. I’ve set a snooze alarm for 21.10. since that’s when the rally would start to become faintly interesting.  _______ UPDATE (June 6, 9:49 a.m.) DUST looks lower at the moment, but we should look for a potentially tradable bounce from 10.27. That’s a ‘D’ Hidden Pivot on the hourly chart that can be found using the following coordinates: A=20.50 on 4/27; B=12.10 on 5/17; and C=18.67. _______ UPDATE (June 8, 9:58 p.m.): The gap-down opening through the 10.27 today was not exactly a sign of good health. Some earlier forecasts, made pre-split, called for a bottom as low as 1.07. First things first, though: I am now projecting a minimum 5.67 over the near term. Will DaBoyz have to split this dreck yet again in order to draw in a few more rubes?  The 5.67 target can be found using these coordinates on the daily chart; A=25.10 on 4/14; B=12.10 on 5/17.

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The consistent 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.

Another secret Rick will share with you, “camouflage trading,” takes more time to master, but once you get the hang of it trading will never be the same. The technique entails identifying ultra-low-risk trade set-ups on, say, the one-minute bar chart, and then initiating trades in places where competition tends to be thin.

Most important of all, Rick will teach you how to develop market instincts (aka “horse sense”) by observing the markets each day from the fixed vantage point that only a rigorously disciplined trading system can provide.

The three-hour Hidden Pivot Course is offered live each month. If it’s more convenient, you can take it in recorded form at your leisure, as many times as you like. The course fee includes “live” trading sessions (as opposed to hypothetical ‘chalk-talk’) every Wednesday morning, access to hundreds of recorded hours of tutorial sessions, and access to an online library that will help you achieve black-belt mastery of Hidden Pivot trading techniques.

The next webinar will be held on Tuesday, June 28. Click below to register or get more information.

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An Introduction to the Hidden Pivot Method

This 9-minute video explains Rick's trading and forcasting method.

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