April 2009

We've been playing cat-and-mouse with Silver Wheaton, trying to get long on weakness rather than on strength. Let's bid 0.60 today for four _____ calls, contingent on the stock trading ____ or higher. If SLW slips below that price lower the bid for the calls to 0.55 and leave it there for the rest of the day. Judging from the way the bids and offers have been mutating intraday, the calls seem to have a following. Seasoned traders undoubtedly covet the series because once ____ calls are acquired, it's possible to sell other call options short against them without taking much risk. The accompanying graph shows a potential bottoming formation for the ____ near 0.60. It's possible to buy and sell options using ABC target calculations just as we do with the underlying stock. FYI, the stock could fall to as low as _____ if it breaches a midpoint support at 7.66 that has held so far.

Gallows humor kept the Rick's Picks chat room from slipping into coma yesterday as the stock market went into yet another soporific dirge. With swine flu metastasizing globally by the hour, there was talk of Black Plague, and also this revolting remedy, attributed to the late George Carlin: "The best way to get your kids immunized against almost everything is to go to India and order food off a street vendor, throw the food on the street, then feed it to your kids."  We much preferred the household remedy of another subscriber, Don C., who considers grapefruit seed extract one of the most potent immune-system boosters commonly available. He says his family has just increased its dosage to 12 drops mixed with six to ten ounces of juice or water, three times daily.  "It has no side effects and is highly effective,"  notes Don: "The best precaution I personally know of."  Detailed, technical information concerning this remedy is available on the Internet.  But do we dare share with you the latest, scarier-than-scary dispatch from Erich Simon, our intrepid bird-flu correspondent? Reading between the headlines, Erich sees pandemic threats that go well beyond what the news media have reported so far. Here's an excerpt from the e-mail message we received from him yesterday:   'News Fatigue'  "Right on schedule, R, Margaret Chan raised the global Pandemic Alert to Phase Four. A couple of observations. First, the decision to raise the alert [originally] was not to have been made until tomorrow, Tuesday. So the situation must be worse than first appeared, and I suspected as much yesterday. Second, Ms. Chan indicated in her summary that the H1N1 in circulation would not necessarily be the virus that would cause the next Pandemic. This is a shocker that has gone over the heads of the mainstream,

The World Health Organization just raised its assessment of the swine flu pandemic to "Level Four," so perhaps it's time, literally, to get our houses in order. Someone posted a link in the chat room to a list of precautions that are worth taking, but in case you missed it, here's another short list posted my Glenn Klotz at http://athebeach.blogspot.com/ Immune System Booster Rick's Picks subscriber Don Cephus recommends grapefruit seed extract as a highly effective booster of the immune system. He says that his family has just increased its dosage: 12 drops mixed with six to ten ounces of juice or water, three times daily.  "It has no side effects and is highly effective,"  he notes -- "the best precaution I personally know of."  More information is available on the Internet.

Silver Wheaton has upside potential to as high as ____ on the next thrust. Let's try to leverage this possibility by legging into some calendar spreads at the $10 strike. As long as the stock is trading $8 or higher, bid 0.74 for four _____ calls, good through Friday.

The bullish action of the last week has not negated those nettlesome targets down around $11 -- that would take a pop above 13.885 -- but it has reduced the likelihood of their being reached over the near term to a very low order of probability. More immediately, a thrust of at least 37 cents originating from anywhere north of _____ would signal the onset of a potentially much more powerful rally -- one that could hit _____ before mid-May.

Gold played touch-sies with our target yesterday, only to retreat timidly thereafter. The selloff did no technical damage, even on the 15-minute chart, so we shouldn't read too much into it. However, if the futures are to get back in bullish gear, we should ask that they demonstrate their intentions with a leap exceeding ____, a small but significant peak made on the way down in late march. That would create the kind of bullish impulse leg on the hourly chart that would not be easily reversed.

Stocks came crawling out of the gate Monday, ushering in the new week with a display of heart-corroding tedium unseen since....last week. Or the week before that, come to think of it. Look at the graph if you think we've exaggerated. It shows the Dow Industrials in a relentless dither that extends back to early April. The range from highs to lows is about 300 points, an unnatural compression that we might expect to give way to an explosive move at some point. Oftentimes such moves are telegraphed by Bollinger Bands, which compress and decompress according to whether a stock is range bound or breaking out. The bands are quite constricted at the moment, suggesting that the Indoos may not continue to mark time for much longer. So which way will stocks break when they finally do? Our hunch is higher, even though that is not what we are feeling deep in our gut. However, when we are unable to come up with a single good reason for stocks to rally,  that's when we are most likely to assume a rally is coming. There is some technical evidence to support this, and we trotted out the bullish argument recently in the form of a paean to Goldman Sachs (GS).  The stock, which quite clearly has captured the hearts and minds of Wall Street these days, does not look like it wants to go down. To the contrary, it looks like it's fixing to rally to at least 144, a Hidden Pivot target we broached here the other day. That would represent an ascent of nearly 20% from these levels, but if GS were to fall to 107 in the meantime, we'd be ready to back up the truck and buy 'em at that price, since that's about as much of a

Nothing has altered the appeal of the ____ rally target broached here earlier, and it should be held as our minimum upside target as long as support at 823.00 is not breached. In the meantime, expect bulls and bears to continue to duke it out above and below 857.00, the midpoint sibling of the ____ Hidden Pivot.

The bull trend begun in mid-February is still (mildly) dominant and could propel the futures to as high as ____. It may be starting to reassert itself today, since a corrective trend begun on April 17 that should have reached a downside target at ____ is having trouble bashing the midpoint support, ____, into submission. At the moment, you could say that the bearish correction is struggling for its life as it oscillates violently around 48.50. The bullish and bearish patterns referred to above are shown in the chart.