DaBoyz will need to halt the carnage in the tech sector to turn the broad averages around, but it’s hard to imagine which stock they might call on to lead the turn. Shares are in a delicate way, and even a small grey cloud on the news horizon could kill a nascent rally. Our key bellwether, AMZN, looks as though it will have to fall at least another 2.5%, to around 489, before it finds decent traction. If this happens quickly and within an hour or so of the opening bell, that could provide the emetic needed to set up a short squeeze. But if index futures open relatively flat look out below, since that could embolden bears to go for the gusto.
A Playbook for MondayPosted Sunday, February 7 0 comments
$ESH16 – March E-Mini S&P (Last:1846.00)Posted February 8, 2016, 7:49 pm
$GCJ16 – April Gold (Last:1168.10)Posted February 7, 2016, 8:58 pm
$LNKD – LinkedIn Corp. (Last:108.38)Posted February 7, 2016, 6:15 pm
The 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.
$+CLH16 – March Crude (Last:31.89)Posted February 4, 2016, 12:17 am
Wednesday’s rally breached the 32.19 midpoint pivot (see inset) by a decisive 59 cents, implying that further progress to the 34.97 target is no worse than an even-odds bet. Accordingly, I’ll suggest getting long to a 34.97 objective with a ‘mechanical’ bid at 32.19, stop 31.26. There’s a chance the futures could push higher without coming down to our bid, but you can increase your odds of filling, while greatly lowering the entry risk, by using a ‘camouflage’ entry. It should be based on an uptrending abc pattern on a chart of 5-minute degree or less.______ UPDATE (11:09 p.m. EST): Entry at 32.19 as suggested above would have caught a ride to as high as p2=33.58 and produced a quick gain of as much as $1390 per contract. The subsequent pullback left the 34.97 target intact, although not necessarily the trade. If you entered on multilots and took a partial profit at p2, use it to cushion a wide stop-loss for what remains, targeting 34.97.
$USH16 – March T-Bonds (Last:163^13)Posted January 31, 2016, 10:25 pm
Much 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.
$AMZN – Amazon (Last:482.07)Posted January 28, 2016, 9:34 pm
The 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.
$SLW – Silver Wheaton (Last:13.41)Posted January 19, 2016, 8:29 pm
$+CDH16 – March Loonie (Last:0.7261)Posted January 19, 2016, 7:37 pm
In 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.
$DXY – NYBOT Dollar Index (Last:97.35)Posted December 17, 2015, 9:33 pm
$+TLT – Lehman Bond ETF (Last:129.00)Posted December 13, 2015, 6:22 pm
Friday’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.
$TWTR – Twitter (Last:31.15)Posted October 18, 2015, 6:02 pm
I’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.
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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.
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.
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