by Rick Ackerman on March 10, 2009 12:01 am GMT
I’ve reproduced April Gold’s weekly chart as a reminder of why we shouldn’t be too concerned about the selloff that has followed the most recent push above $1000. The thing to notice is that this impulse leg, which topped at $1007 on February 20, exceeded three prior peaks on the weekly chart, two of them “external.” This suggests not only that the bull trend is quite robust, but that it is likely to produce a follow-through thrust equal to the first. More immediately, however, there is a downside target I have flagged at 886.40 (a Hidden Pivot that can be bottom-fished with a very tight stop-loss), as well as support at 881.56 that is Fibonacci-based. Together they are likely to exert a magnetic pull on Gold that augurs a further correction of at least $35 from these levels. Alternatively, it would take a print at 946.00 to turn the hour chart rambunctiously bullish. We’ll reevaluate Gold’s prospects when either of these thresholds is reached, but until then it is merely a scalp-trade best identified on the lesser charts.
by Rick Ackerman on March 10, 2009 12:38 am GMT
Monday’s chat room buzz had it that a strong rally could erupt at any moment. Perhaps, but there’s no use cluttering our mind with such ugly speculation unless the futures pop through the three peaks show in the chart without drawing a breath. In the meantime, I’m still looking for a battle o f the mindless near 675 before the futures head further south. Please note that the three peaks shown in the chart are configured in such a way as to promise an excellent “camouflaged” opportunity to enter with the trend on a rally that dies between peaks 3 and 4. If and when this occurs, I may be able to provide detailed guidance for traders in the chat room. _______ UPDATE: Thirty minutes into the session, I was able to provide real-time trading guidance in the chat room that would have yielded a quick profit of at least $200 on at least a portion of any position entered. If multiple contracts were entered, a partial profit would have been taken at the Hidden Pivot midpoint, 706.75. Thereafter, the 3.00-point trailing stop advised would have caused longs to exit the remainder of the position at 704.75. The 714.50 target is still valid (as of noon) and will remain unless 698.75 is exceeded to the downside.
by Rick Ackerman on March 10, 2009 1:00 am GMT
With a little luck, the Diamonds will swoon this week to a Hidden Pivot support shown in the chart, 63.28. If so, let’s be ready with a bid for two (or multiople thereof) April 65 calls (DUDM). I estimate they will be trading for around 2.50 then, but you may be able to improve on the price by monitoring the bid/asked for the options as DIA approaches tehe target. I’ve included a snapshot of an options calculator that shows how I arrived at a fair price for the calls. The 39 volatility estimate comes from TradeStation. _______ UPDATE: We’ll have to put the trade on hold for now, since the Diamonds are headed sharply higher this morning.
by Rick Ackerman on March 10, 2009 1:13 am GMT
With a strong thrust that was predicted here last week, the futures have easily exceeded 47.62, the highest target that can be derived from the hourly chart. They also refreshed the bullish trend by creating a new impulse leg in the process. The leg has not yet terminated, but if it were to stretch past 50.88 before taking a breather, we’d likely be looking at the booster stage of potential moon shot. For trading purposes, there were no corrective patterns Monday night (as of 1:10 a.m.) that would yield a low-risk entry point. However, there were many prior peaks on the lesser charts that could conceivably be used to leverage an entry with-the-trend. If you are up to such an approach, I’d suggest starting with the five-minute bars.
by Rick Ackerman on July 30, 2010 12:44 am GMT
by Rick Ackerman on July 13, 2010 6:17 am GMT
by Rick Ackerman on July 12, 2010 12:01 am GMT
This Just In... for Tuesday
by Rick Ackerman on March 10, 2009 10:49 am GMT
Collected comments from one of the founding fathers on the subjects of money, politics, and banking. Well worth a read. Download the PDF.
by Michael Johnston on March 10, 2009 11:15 am GMT
by Rick Ackerman on March 10, 2009 11:44 am GMT
Paul A. Cleveland writes on Misus Daily:
In last year’s hit movie, The Dark Knight, there is a classic scene between Alfred and Bruce Wayne. A befuddled Bruce cannot figure out what the Joker is actually trying to gain, and he is sharing his consternation with Alfred. Alfred responds by telling Bruce that some men are just different and, in one of the great lines of the movie, states bluntly, “Some men just want to see the world burn.”
While it is quite early on in the new administration’s term in office, it appears to be behaving in exactly this way. Obama is playing the part of the Joker to perfection, aided and abetted by the likes of Nancy Pelosi and Harry Reid. The only difference being that, instead of wearing a clown’s face, he has chosen to look promising and speak lofty words of nothingness as he and the other Democratic leaders push the nation ever closer to economic collapse.
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The next Hidden Pivot Webinar will be held on 6/30 - 7/1. This two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register,
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Why the Juicest Shorts Are Un-shortable
by Rick Ackerman on March 10, 2009 12:01 am GMT · 4 comments
Why is it that the juiciest shorts are all but un-shortable? The shares of Goldman Sachs, for instance. We predicted here a while back that the stock would eventually trade below $30, a 67 percent plunge from its then price of around $90. We were so sure of this that we promised to don a grass skirt and dance the hula in Times Square in the middle of winter if we were wrong. We’re still sure of it: Goldman shares are headed for disaaster. So why not simply short the stock in size, forget about it, then come back in two years to collect the huge profit that would be sitting in our trading account? The answer lies in the chart below. If you consider it as a whole, it’s plain to see that Goldman, like so many other financial stocks, has been devastated by the bear market begun eighteen months ago. It has dropped 81 percent so far from high to low.
But look at how the decline has played out. If you had had steel-trap nerves and the genius to short a thousand shares when the stock spiked to an all-time of $250 in October 2007, you’d undoubtedly have been giddy over the $50,000 profit you’d earned when GS subsequently fell to $200 over the next six trading days. But four days later, 80 percent of your gains would have been wiped out when Goldman shot up to $240. » Read the full article