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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
We hold 400 shares acquired on Tuesday for 17.07. (The stock bottomed the next day at 16.76, somewhat lower than the 16.97 stop-loss I’d given, but we canceled it and let the trade ride.) For now, use a stop-loss at 16.62 while offering 200 shares at 17.41. That’s a penny below a Hidden Pivot target on the 10-minute chart, and we should infer that it will be reached if AKAM can get above its sibling midpoint resistance, 17.23. _______ UPDATE (Sep 4, 2:45 p.m.): The stock poked up to 17.50 this morning, allowing us to close out half the position for a small profit. Let’s let the remaining 200 shares (or half of your initial position) ride with a 17.02 stop-loss for now. Our adjusted cost basis is 16.73.
Silver Wheaton is screaming higher in after-hours trading, so we may get a chance to short eight December 15 calls for 0.45 against the eight Dec 12.50 calls that we own for, effectively, 0.15 apiece. Our original cost basis was 0.45, but we were able to reduce that by 0.30 by selling half of the original 16-call position near the top of yesterday’s steep rally. The trade was featured as a Pick of the Day, so I am hopeful that many of you were able to take advantage of what looked, from the get-go, like an easy opportunity. From a Hidden Pivot perspective, the highest blowoff target I can identify for today lies at 11.14, a Hidden Pivot that comes from the lesser charts.
The futures somewhat exceeded the 978.00 target we were using as a short-term objective. This suggests more upside just ahead, presumably to at least 998.00; or if any higher, to 1012.90. The provenance of both targets is shown in the accompanying bar chart.
Shortly before 1 a.m., the E-Mini S&P had done nothing so far tonight to call attention to itself. However, in the wake of Tuesday’s nasty reversal day, the futures are clearly tortured by the prospect of being dragged into a lower Circle of Hell. Before that can happen, though, a presumably supportive cluster of lows recorded two weeks ago just beneath 980.00 must be trashed. From there, it would take another 16.25 points’ worth of selling to turn the daily chart bearish. Indeed, it would be ominous if that impulse leg were unbroken on the daily chart between 1004.00 and 963.75.
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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 Thursday
A crystal-clear Hidden Pivot target at 9.89 survived for all of a half-hour, hinting that this lump of brick dust will eventually go much lower before it finds a real bottom. Anyone tempted to bottom-fish should keep the 4.41 target that I disseminiated in the chat room in mind. More immediately, a pop today that exceeds 9.64 would signal the beginning of a potentially significant dead-cat bounce.
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on Feb. 29th - Mar. 1st. 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, click here.
Surfing the Trend in Silver Wheaton
by Rick Ackerman on September 3, 2009 12:01 am GMT · 6 comments
We occasionally recommend option trades designed so that even the village idiot could hope to make money on them. These minutely detailed “Pick of the Day” selections are intended to make back one’s annual subscription cost at the very least, but also to help traders get over whatever trauma they may have suffered trying to profit with puts and calls. This is quite a feat, even for us — and we’ve been at it for more than 35 years. Truth to tell, it » Read the full article