Friday, April 24, 2009

I would have expected the great earnings news earlier this week to get Apple to its target near $130 more quickly, but it appears that the broad averages have been weighing the stock down. There are two Hidden Pivot rally targets we can use for now: _____; or if any higher, _____.

We're playing with the house's money in this stock, since we made a nice chunk of change leveraging low-risk calendar spreads tied to the April expiration. This time I'd like to short the little flying pig, probably by buying some way-out-of-the-money put calendar spreads at the peak of the stock's next rally. That could occur at _____, my minimum upside projection for the near term; or at _____if any higher

We hold four _____ puts @ ____, and the market could not be less kindly toward them, since Microsoft has been buoyant at a time when option volatilities have collapsed. Still, October is a long way off, and I doubt that the software giant's fabulous earnings news -- i.e., that it met Street estimates by laying off a whole bunch of workers -- will propel this rally very far. Sit tight for now, and keep in mind that our objective is to spread off our already small premium risk when the stock turns weak.

The Hidden Pivot target at 910.30 stopped yesterday's rally cold, but the weak selloff that has followed hints that Gold is about to get second wind. There is no mistaking the importance of the 911.80 high that the June futures will need to surpass in order to turbocharge the hourly chart, and any progress above it, particularly a weekly close above it, would be very good news for gold bulls. Rather than speculate any further, we'll let the action dictate the outlook. Most immediately, though, the futures looked primed for a thrust to _____, subject to

The downside target I identified in today's commentary is shown in the chart, with an AB impulse leg that looks pretty kosher. The actual target lies at 809.75, and it sibling midpoint at 834.25 has already been breached. Even so, and as you can see, it wouldn't take much of a rally to negate the point 'C' high of the downtrend. Given Microsoft's short-squeeze reaction

We missed the turn yesterday in Silver Wheaton, but there may be a way to catch the rally without risking much.  The chart I've included with SLW can be interpolated by subscribers who are comfortable with the "camouflaged" entry technique that I have emphasized in recent webinars and weekly tutorial sessions.  Have fun!

Yesterday's trade recommendations scored two dead-center bullseyes, each calling a rally top within a single tick.  In Gold, we were looking for the June Comex contract to leap sharply to 910.30. When the dust had settled, the futures had traded as high as 910.40, the peak of an $18 rally. Although the high fell just shy of the 911.90 print needed to refresh the bullish trend, it seemed a foregone conclusion the futures would get there, and soon, since they were maintaining altitude in after-hours trading following a weak pullback from the intraday peak.  Comex Junes were an opportune short sale for day traders glued to the 910.30 target; now, however, if they continue rising to at least 911.90 as we expect, bears had better run for cover. A more detailed forecast appears in tonight's touts section, so check it out.  June Crude's rally proved equally felicitous, since it peaked just a penny below a Hidden Pivot target we'd flagged at 49.93. The analysis had included a detailed trading strategy, given as follows: "June Crude appears to be making a turn from a so-far low at 46.72. The rally projects to 49.93...  [so] you can get short at 49.91 with a stop-loss as tight as 11 cents. Switch to a 15-cent trailing stop on a pullback to 49.58, and use 49.30 as a minimum objective."  In the actual event, after hitting the 49.93 target, crude sold off sharply to 48.52, yielding a maximum theoretical profit on the trade of around $1,400 per contract. In practice, a single contract tied rigidly to a trailing stop would have produced a gain closer to around $300. Frankenstein's EEG Now, with Friday Follies coming up, we hesitate to second-guess the broad averages, since they have been describing the kind of price patterns this week