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COMMENTARY for Monday
TODAY'S ACTION for Monday
PICK OF THE DAY for Monday
Opportunity beckons, since the Diamonds are closing on a Hidden Pivot resistance at 95.82 that looks likely to cause a stall. Buy two September 95 puts (DAVUQ) if and when the stock gets there. I estimate they'll be selling for around 1.76 if you want to park a limit order with your broker, but you may be able to improve on that price by tracking the option bid/offer as the stock nears the target. _______ UPDATE (10:51 a.m. EDT): This one is working nicely so far, since the Diamonds have rallied to 95.81, a penny from the target, and the September 95 puts traded down to 1.75, a penny below where I'd suggested bidding. Officially, then, we hold two puts for 1.75. Use a fairly tight stop-loss for now at 96.07. FURTHER UPDATE (1:52 p.m.): Lower the stop-loss to 95.55 for the rest of the day, and at the same time offer two September 92 puts short for 1.40. The order is good as long as you hold the September 95 puts.
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Rick's Picks for Monday
Anyone who bought the 11.31 downside target given here on Friday would have caught a strong bounce from within a penny of the intraday low. Some partial profit-taking was in order, but if you still hold a position, you should be using a stop-loss that will take you out of it with no loss or a small gain. UNG’s violent relapse just before the close hints of more trouble to come, which could mean slippage to as low as 9.89. More immediately, though, there are two Hidden Pivots associated with a lesser pattern that could brake UNG’s fall at either 11.26 or 10.79. Alternatively, UNG would need to touch 11.78 today to suggest that Friday’s bounce was more than a fleeting reaction.
The long-bond futures look like they could continue to do nothing for more weeks or even months. On the daily chart, the last time they created a bullish impulse legs was two months ago, in late June. Since then. however, bullish and bearish feints have canceled each other out, suggesting that indecisiveness is likely to rule for the foreseeable future. A pop this week exceeding 121^31 would change that, turning the picture bullish immediately, but I am certainly not expecting it.
A Hidden Pivot target at 1027.50 first noted here on August 14 looks relevant at the moment, since Friday’s high at 1026.75 came within three ticks of it. One above that number, however — a prospect that is not exactly a longshot bet in this never-ending bear rally – the next likely stop would be 1046.00, a target that comes from the daily chart (where A= 772.75, March 30). More immediately, a lesser target at1034.00 can be shorted by scalpers with a 1.25-point stop-loss provided it’s hit in the first hour and 1020.50 hasn’t been exceeded to the downside first. _______ UPDATE (10:56 a.m. EDT): The futures have made a precarious top at 1034.25 exactly 57 minutes into the session. If you shorted at my number, stick with the 1.25-point stop-loss that was given. _______ FURTHER UPDATE (1:11 P.M.) : The futures have dived to 1025.00, so I’ve suggested covering half of any shorts from 1034.00 at 1026.00 or lower. You’ll be on your own now, but you should hold a small piece of the initial short for a possible grand slam. If you shorted a single contract, trail the stop 3.25 points — or wider at your discretion if you’re playing for a jackpot. (You can set the stop above 1035.00 if this is your goal.)
Gold was flagging lower Sunday night after Friday’s spirited thrust, but buyers weren’t giving up much ground. The so-far low of the pullback is 952.20, and if it holds, the futures could put bears on the ropes by vaulting a Hidden Pivot midpoint at 959.60. That would suggest more immediate upside to at least 967.00.
If Goldman falls without having bettered Friday’s 164.90 high, you can bottom-fish a midpoint support at 160.75 with a stop-loss as tight as 15 cents. If the stop is hit, odds of a more serious correction to as low as 156.61 would shorten.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
SIDE BETS for Monday
At Friday’s beaten-down lows, the Dollar Index still had a ways to go before hitting the downside target at 76.58 given here earlier. Keep in mind that if the support fails, that would grease the skids down to as low as 72.93, the ‘D’ target of a larger pattern.
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My Barber Shares Secret of His Wealth
by Rick Ackerman on August 24, 2009 12:01 am GMT · 7 comments
(In the years leading up to the dot-com boom, I freelanced an investment column to the Sunday San Francisco Examiner. Following is one of my favorites. It tells how Louie Piro, my barber when I lived in Mountain View, became a multimillionaire by investing his spare cash – amounting to all of $5 a week – in promising companies when he started cutting hair in the 1950s. Louie was still cutting hair long after he could have retired, but his weekend getaways were anything but ho-hum: marlin fishing in Cabo, golfing in Las Vegas and Hawaii, and casino junkets to Atlantic City. RA)
If there is a single word to sum up the success of investor Louis Piro, that word is “dull.”
Piro has never made a killing on a stock. He doesn’t play hunches and he runs from hot tips. He says he passed up Pfizer not long ago because its shares were too pricey even before » Read the full article