December 2007

No sooner had we resigned ourselves to the vertigo-inducing logic of a ‘Santa Rally’ than the stock market surprises by swan-diving from a three-meter height. Talking heads attributed the weakness, as well as the upward skew of bullion and gold quotes yesterday, to Benazir Bhutto’s assassination, but since when have the markets cared about what was going on in the real world, especially when the news concerned mere homicidal mayhem in a country so distant as Pakistan? We’d be surprised if one fund manager in a hundred could even locate Pakistan on a map, so we seriously doubt that they were much shaken by the murder of Bhutto yesterday by a suicide bomber. Pakistan’s bourse was said to be rattled, but who knew that it was one of the hottest stock market’s in the region to begin with?

Concerning the U.S. stock market, we’ve speculated here before that even the sight of a nuclear mushroom cloud over L.A. or New York would not likely unsettle shares for more than a day or two. Why should it, when stocks have barely flinched at the prospect of a full-blown real estate deflation — or almost as bad, a Hillary Clinton presidency? And it’s not just the events of the real world that equities have contrived to ignore; they have also flouted time-tested technical and cyclical indicators that have only very rarely been wrong. One such indicator held that in years ending in 7, stocks have shown an overwhelming tendency to plummet in the four-week period between early October and early November. The declines have averaged about 15%, and until this October the indicator had worked more than 90 percent of the time. Not this time, though.

Bull That Wouldn’t Die

The Bull Market That Wouldn’t Die (TBMTWD) has reproached an even more time-honored Wall Street adage — that the stock market cannot abide uncertainty. If this was true before, it appears to be true no longer. How else to explain the fact that the Dow Industrials are trading within less than six percent of record highs despite the fact that valuations for practically every fixed-income security currently in play have been cast into chaotic uncertainty by the subprime mess? If you think this is an exaggeration, then you must have missed a Wall Street Journal story a while back that ran under the headline, “Credit Pressure Filters Down to Muni Market”. That’s right, the staid, rock-solid $2.5 trillion market for tax-free municipal bonds has developed a case of the jitters because of bond insurers’ exposure to troubled mortgages. Are the insurers good for it? Yeah, sure — as long as the American taxpayer is alive and breathing, they are.

Meanwhile, TBMTWD continues to behave as though the powers that be have everything under control ‘ and never mind the holiday-shopping bust that has become the obsession-of-the-hour on the business pages. But if you think Mr. Market is about to get in step with reality by declining for more than two consecutive days, don’t hold your breath. The stock market is so clearly in the thrall of money-manager mindset that we will not see it discount the housing bust, recession, a credit contraction, a collapse in consumer spending and rising unemployment until institutional investors have been seized by outright panic. And then, how low might stocks fall once the panic has run its course? To answer that question, ponder this: Who will be the buyers of stock, and at what price, when the big pension funds start to dump shares willy-nilly?

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Learn My Secrets

‘While perusing some of your posts chronologically from months back, I’m truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny – and then some.’

– Colin L. MacVeagh, a subscriber

Aloha Rick. I just want to thank you personally for all of your posts in Comex Gold and Silver. I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT: Your New Year’s Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at 603.00 — the exact bottom.

– Mark Johnson, Hawaiian subscriber

***

Want to learn exactly how I do it? Then click here for details concerning the upcoming online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an ‘expert’ what he thinks about a particular stock or ‘the market.’ That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye ‘ to see charts as ‘art,’ with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the ‘buy’ and ’sell’ signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader, I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding ‘live’ seminars ‘ including hotel and travel costs, and the rental of conference facilities — are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the ‘UPCOMING’ tab.

Tiresome as yesterday’s price action may have seemed, it nonetheless generated robustly bullish signals for stocks and gold. Both vehicles marginally exceeded bullish price triggers that had been flagged in Wednesday’s Touts section. With respect to the Dow Industrials, we now expect a 500-point rally, presumably extending into early 2008. This is commensurate with a target in the E-Mini S&Ps that lies well above Wednesday’s settlement price. We can’t believe it either, and that’s why we plan to monitor the hourly chart closely for signs of a bearish turn.

The Hidden Pivot rally target became a ‘go’ when the E-Mini exceeded the target’s sibling midpoint at 1506.50 by two points. That’s not much, and we acknowledged at the time that predicting a major rally on such evidence was highly speculative, akin to projecting the winner of a Presidential election based on results from West Virginia and New Hampshire. Even so, the pattern that produced the target is so clear that even a slight penetration of its midpoint must be regarded as unmistakably bullish. This is not withstanding the fact the Dow seemed to struggle to close just a smidgen higher yesterday, and that evidence is mounting daily that the weakness in the housing-sector could easily turn into a freefall.

Housing Decline Accelerating

Indeed, the New York Time reported yesterday that home prices across the U.S. had fallen for the tenth consecutive month. Not only that, ‘The one disconcerting thing about the number is the rate that prices are falling is accelerating,’ said Patrick Newport, an economist at Global Insight, a research firm outside Boston. We linked the story, along with some other, equally sobering items, in the Intraday Notes section. There is no question in our mind that real estate, as well as the U.S. economy, is headed toward deep, deep trouble. Wall Street is bound to notice sooner or later, but until that happens, we’ll trust our technical indicators, even when they tell us, as they are doing now, that something so absurd as a major rally is about to occur. This outlook is not chiseled in stone

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Learn My Secrets

‘While perusing some of your posts chronologically from months back, I’m truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny – and then some.’

– Colin L. MacVeagh, a subscriber

Aloha Rick. I just want to thank you personally for all of your posts in Comex Gold and Silver. I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT: Your New Year’s Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at 603.00 — the exact bottom.

– Mark Johnson, Hawaiian subscriber

***

Want to learn exactly how I do it? Then click here for details concerning next month’s online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an ‘expert’ what he thinks about a particular stock or ‘the market.’ That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye ‘ to see charts as ‘art,’ with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the ‘buy’ and ’sell’ signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader, I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding ‘live’ seminars ‘ including hotel and travel costs, and the rental of conference facilities — are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the ‘UPCOMING’ tab.

Obligatory year-end mark-ups are bound to push stocks still higher into New Year’s Eve, but don’t expect the Dow to hit new record highs any time soon. That would require a 650-point thrust from these levels, and although a rally of that magnitude would require a trajectory less steep than the short-squeeze that added 700 points to the Industrial Average in the days immediately before and after Thanksgiving, buyers would face far more daunting challenges of supply this time around.

Look at the graph above and you can see why. The Thanksgiving rally pushed past just a single prior peak, but a thrust now of equal magnitude would have to get past three ‘priors’ to achieve a new all-time high. Although we’re not going to rule that out, if it happens, odds favor a series of thrusts none of which exceeds more than a single prior peak. A more powerful push ‘ i.e., one that surpasses two or more ‘priors’ without a pause of more than a single day ‘ seems implausible, since it would imply that we are in a true bull market with upside potential far above 2007’s highs.

In any event, the key to determining whether the long-term bull market is still intact lies in how easily the rallies puncture prior peaks on the hourly and daily charts. We’ll be tracking this indicator closely in the weeks ahead, so stay tuned to the Touts section of Rick’s Picks if you’d rather not guess about such things.

###

Learn My Secrets

‘While perusing some of your posts chronologically from months back, I’m truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny – and then some.’

– Colin L. MacVeagh, a subscriber

Aloha Rick. I just want to thank you personally for all of your posts in Comex Gold and Silver. I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT: Your New Year’s Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at 603.00 — the exact bottom.

– Mark Johnson, Hawaiian subscriber

***

Want to learn exactly how I do it? Then click here for details concerning next month’s online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an ‘expert’ what he thinks about a particular stock or ‘the market.’ That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye ‘ to see charts as ‘art,’ with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the ‘buy’ and ’sell’ signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader, I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding ‘live’ seminars ‘ including hotel and travel costs, and the rental of conference facilities — are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the ‘UPCOMING’ tab.

It’s snowing like crazy here in Boulder at the moment, promising the whitest Christmas the Front Range has seen in recent memory. For the last week or so the snow has been piling up where it was most desperately needed — in the drought-parched southwestern corner of the state, near Telluride and Durango. I’ll be headed for the slopes myself shortly to meet an old friend and his family in Vail, provided I-70 is driveable. Since I’ll be away from my office over the weekend and will miss Monday’s shortened session on the NYSE, the next regular edition will be out on Wednesday. In the meantime, to all of my readers, I want to wish you the very happiest of holidays!

###

Learn My Secrets

‘While perusing some of your posts chronologically from months back, I’m truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny – and then some.’

– Colin L. MacVeagh, a subscriber

Aloha Rick. I just want to thank you personally for all of your posts in Comex Gold and Silver. I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT: Your New Year’s Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at 603.00 — the exact bottom.

– Mark Johnson, Hawaiian subscriber

***

Want to learn exactly how I do it? Then click here for details concerning next month’s online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an ‘expert’ what he thinks about a particular stock or ‘the market.’ That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye ‘ to see charts as ‘art,’ with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the ‘buy’ and ’sell’ signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader, I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding ‘live’ seminars ‘ including hotel and travel costs, and the rental of conference facilities — are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the ‘UPCOMING’ tab.

We spent the day thrashing around in expiring Research In Motion puts and calls, which turned lethal after the close. The stock had climbed steadily throughout the session, settling at 108 with a quite respectable gain of $6 on the day, But that was before news came out immediately after the bell that RIMM had beaten by three cents a supposedly over-the-top street estimate of 62 cents per share. Within minutes, a short-squeeze panic developed that pushed the stock $11 higher to a peak at 119.45 that may have been surpassed by the time you read this.

(Click on chart to enlarge)

Seldom have we been so tempted to short expiring options willy-nilly, since implied volatilities were as high as we have seen them in more than 30 years of trading. In fact, December option volatilities were around 240 ‘ about four times what we might expect for a ‘typical’ $100 stock that is traded mostly by nut-jobs. But with December expiration just hours away, who could resist the temptation to sell, say, December 115 calls for $175 apiece that were seven dollars out-of-the-money!? Well, anyone who took this sucker’s bet would be in pain right now, since the stock at its evening-session high would have made each and every Dec 115 call shorted for $175 of “free money” a $200 loser.

Greed Is Good — Up to a Point

We had begun the day ourselves short some December 100 straddles for 10.20 ($1020), but we were protected above 110 by some December 110 calls we’d acquired as an afterthought for 2.00 ($200). This meant the worst we could have done per combo was to lose $180, versus a maximum possible gain of $820. Not content with such fat odds, we greedily shorted some December 90 puts for good measure, offsetting any possible loss with the stock north of $90. The short sale of way-out-of-the-money puts seemed like a capital idea until ‘Snurf Ninja’ mentioned in the Rick’s Picks chat room that RIMM’s earnings were due out after the close. Ahhh! So that’s why ‘those idiots’ were paying as much a 1.00 for two-day puts that were twelve dollars out-of-the-money!

RIMM shares were frolicking above $100 at the time, but as we well know, if earnings were about to come in three cents below expectations rather than three cents above them, RIMM could easily be trading $20 lower in the blink of an eye. So we covered the December 90 puts, paying even more for them than some of ‘the idiots’ who’d been buying them earlier in the day.

For RIMM traders, the dust won’t settle until put and call action resumes on Friday morning and catches up with the stock. Our loss with the stock above $110 will be minimal in any case, but it took an eight-side option position to fight the demons to a draw.

###

Learn My Secrets

‘While perusing some of your posts chronologically from months back, I’m truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny – and then some.’

– Colin L. MacVeagh, a subscriber

Aloha Rick. I just want to thank you personally for all of your posts in Comex Gold and Silver. I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT: Your New Year’s Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at 603.00 — the exact bottom.

– Mark Johnson, Hawaiian subscriber

***

Want to learn exactly how I do it? Then click here for details concerning next month’s online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an ‘expert’ what he thinks about a particular stock or ‘the market.’ That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye ‘ to see charts as ‘art,’ with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the ‘buy’ and ’sell’ signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader, I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding ‘live’ seminars ‘ including hotel and travel costs, and the rental of conference facilities — are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the ‘UPCOMING’ tab.

Saudi clerics have issued what amounts to a fatwa against the dollar, but their efforts might be better spent finding ways to invest surplus petrodollars so that the benefits are felt outside the royal palaces. Officially, the Wahabists called on the Saudi government to fight domestic inflation by decoupling the riyal from the dollar. ‘We remind you of Prophet Mohammad’s words that you are shepherds who are responsible for your flock,” the group of 19 well-known clerics, said in a statement.

We can sympathize with rank-and-file Saudis who are more concerned about the price of bread and milk than about the cost of custom-outfitting a Boeing 777. But abandoning oil’s peg to the dollar in favor of, say, the euro, is not the answer, since such a strategy could backfire disastrously. How so? For starters, the world market for oil would dry up precipitously if buyers had to pay for the stuff with relatively hard money such as the euro. That is why persistent rumors that oil producers will eventually demand gold, the hardest money of all, for oil are so ridiculous. How much oil do you think the world could afford if it had to pay for it in something other than snide?

‘Spongy Money’ Works

Clearly, a spongy dollar suits global trade perfectly — suits even Arab sultans and princes, who, by buying shares in Citigroup, and in downtown Las Vegas and Detroit, have revealed themselves to be almost as frivolous as the Japanese were in the late 1980s, when they binged on such trophy assets as Rockefeller Center and Pebble Beach.

While it is true that oil customers who settle up in dollars are effectively paying for it with confetti, there is as yet no shortage of opportunities for the sellers to convert the confetti into real goods and services. Moreover, the petrodollar moguls need not confine their buying spree to U.S. Treasurys and other assets that could be imperiled by a falling dollar. They need only copy the Chinese, who, while holding a considerable portfolio of U.S. debt, have diversified into oil, natural gas, timber and other natural resources globally with a vengeance.

Bottom line: A fatwa against the dollar would bring about economic martyrdom for oil producers and economic disaster for the rest of the world.

###

Learn My Secrets

‘While perusing some of your posts chronologically from months back, I’m truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny – and then some.’

– Colin L. MacVeagh, a subscriber

Aloha Rick. I just want to thank you personally for all of your posts in Comex Gold and Silver. I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT: Your New Year’s Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at 603.00 — the exact bottom.

– Mark Johnson, Hawaiian subscriber

***

Want to learn exactly how I do it? Then click here for details concerning next month’s online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an ‘expert’ what he thinks about a particular stock or ‘the market.’ That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye ‘ to see charts as ‘art,’ with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the ‘buy’ and ’sell’ signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader, I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding ‘live’ seminars ‘ including hotel and travel costs, and the rental of conference facilities — are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the ‘UPCOMING’ tab.

The hourly charts continue to hold the key these days to ‘phenomenally accurate forecasts.’ For example, after predicting a 30-point drop in the E-mini S&P futures a few days earlier, we used the 60-minute chart to catch the low of yesterday’s trampoline bounce within a single tick (i.e., a quarter-point). Here is the recommendation exactly as it went out to Rick’s Picks subscribers over the weekend. The December contract had settled on Friday at 1468.00:

‘The 1464.00 downside target broached here last week remains valid, but if it’s exceeded by more than a point, look for the downtrend to reach a minimum 1435.75 before exhausting itself. We’ll plan on bottom-fishing 1435.75 with a 1.00-point stop-loss, provided it is reached by Wednesday. The enticingly devious pattern that yielded that target is shown in the accompanying chart.’

(Click on chart to enlarge)

Now, using a 1.00-point stop-loss to try and catch the low of a 30-point plunge may sound like anal-retentive risk control, but in this case our micro-stop was more than adequate, since the futures traded no lower than 1435.50 before embarking on their quite powerful rally. (See chart above). But the icing on the cake was the equally powerful thrust in the Dow Industrials. Using the same ‘enticingly devious pattern’ that had allowed us to nail the exact low in the mini-S&P, we were able to calculate an equally precise Hidden Pivot target for the mini-Dow: 13093. The actual low was just three points from that number, and it turned out to be the launching pad for a 187-point rally.

In Google, a third Rick’s Picks trade recommendation yesterday caught a tradable low with the stock in the midst of a $25 freefall. The 657.92 target we’d furnished would have allowed one to get long the stock on the way down with a stop-loss as tight as 24 cents. This one proved to be for experts only, though, since the $4 bounce off our target lasted for all of five minutes. Still, the price action demonstrated that Google even at its wildest is not so ornery and unpredictable that it cannot traded with stop-losses as tight as a quarter of a point.

All of these Hidden Pivot trades were analyzed during a free Webex demonstration that was held during market hours for non-subscribers. If you would like to be notified of the next such session, simply drop us a line by clicking here.

Inflationists have always maintained that the Fed would do whatever it takes to prevent the economy from slipping into deflation. How seemingly fortuitous, then, that someone deserving of the nickname ‘Helicopter Ben’ was at the helm of the Federal Reserve when it came time to push monetary expansion to its theoretical limit. Recall that the idea behind a helicopter rescue of the financial system was that money would be shoveled out of helicopters, showering $100 bills onto creditors and debtors who’d gotten into dire trouble. Well, that’s pretty much what the Fed has been doing these days — multiplied by a billion —  in concert with the central banks of Europe. If you are a card-carrying banker, it would seem there is almost no limit to the amount of no-questions-asked cash the Fed and its friends have placed at your disposal.

It is reminiscent of the days, in the early 1990s, when the Resolution Trust Corp was charged with bailing out the S&Ls. Back then, just about anyone wearing a suit and tie could walk into an RTC office and come away with the deed to millions of dollars worth of someone else’s foreclosed property. ( I experienced this first-hand, having worked for a hedge fund operator who did it until a string of regulatory infractions caught up with him and ended his career in the securities business.) For a few fabulous months, the RTC was effectively giving away assets to anyone who merely looked respectable. Now the Fed is trying to repeat the tactic, providing practically unlimited borrowing power to banks while they are still able to affect the appearance of creditworthiness.

Criminally Oblivious

This charade may be fooling the fund managers who continue to prop up the stock market with Other People’s Money, but it hasn’t fooled the credit markets, where spreads reflect greatly heightened perceptions of risk in virtually all areas of lending. One wonders how many more bailouts and rescue packages will have to be concocted before confidence is restored to the global banking system? This is a rhetorical question, of course, since investors’ fears have already reached critical mass and will not allow business-as-usual to resume until ALL of the excesses have been wrung out. That implies quite a bit of wringing, by the way, since the dollar value of the subprime mortgage mess alone is currently estimated at half a trillion dollars (and climbing fast).

Meanwhile, although some credit markets have slightly ‘un-frozen,’ this is true only in the sense that an icebreaker might be said to ‘un-freeze’ Arctic seas. Let an impediment halt the ship’s forward progress even briefly, and pretty soon the vessel will be so solidly encrusted in ice that it would take a century of global warming to dislodge it. And that’s where the credit markets are headed, even if the OPM managers have contrived not to notice. When they finally do, we’ll see a day on Wall Street that in mere hours will make up for ten years’ worth of their criminal malfeasance.

Comex Gold has been dancing at the edge of a cliff, although it’s not possible to predict quite yet whether it’s going to fall. However, the outlook for bullion could conceivably turn very ugly quickly, since, if the February contract were to dive below 780.40 this week, it would generate a robustly bearish Hidden Pivot signal on the daily chart. According to our technical rules, such a decline would exceed three prior lows, as the chart below shows, creating a strongly bearish impulse leg in the process.

(Click on chart to enlarge)

Although the negative implications would be somewhat muted if the futures were to hesitate at any one of the supports on the way down, we cannot rule out the possibility that all three supports will be breached in one fell swoop. Were that to occur, there would still be one last ‘fail-safe’ support at 755.50 to lean on, but if it too gives way, Gold would be signaling weakness, probably, for at least the next 2-3 months.

False Signals Rare

Those of you who have been in the Rick’s Picks chat room lately will know that Comex Gold futures have moved very precisely and predictably to Hidden Pivot targets on the hourly chart. Moreover, because we have paid close attention to the formation of impulse legs on both the intraday and daily charts, we have been fooled by an intermediate-term trend change in Gold only once in the last two-and-a-half years (when we jumped the gun on a marginal, and very subtle, signal back in May, 2006).

By and large, the key to accurate forecasting has been to shun ‘billboard’ predictions of spectacular rallies or declines. In that regard, since Gold was in the mid-$600s, we have been focused on a $907 target that is still valid. It would take a $250 washout to negate that target, but, as implied above, a mere $18 decline from Friday’s settlement price could be warning of stagnant prices at best into Spring.

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Free Hidden Pivot Demo in Real Time

Can a novice learn in mere months how to interpret stock and commodity charts more accurately than many experts who do it for a living? Rick’s Picks invites you to find out for yourself. Click here, then on the ‘Upcoming‘ tab, to sign up for this Tuesday morning’s Free Hidden Pivot Demonstration. It will be held during market hours and is open to anyone who might be interested in attending a Hidden Pivot Seminar, including the online Webex session slated for January 5-6. During Tuesday’s free session, we will attempt to find actionable opportunities, in real time, in such popular trading vehicles as Comex Gold, the Diamonds and QQQQs.

If you are skeptical that chartist ‘voodoo’ can correctly call the trend in any time frame, or that it can consistently identify price reversals to within mere hundredths of a point, then I would urge you to attend this session. You will come away convinced not only that it is possible, but that you can do it yourself with just a few hours of training. You’ll learn to look at stock and commodity charts in a completely different way, using your eye to discriminate winning trading patterns from losers as you would good art from bad.

Seats are limited, so register soon if you want to be assured of getting a spot.