July 28th, 2014
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Global Middle Class Glimmers in Distance

by Rick Ackerman on September 8, 2009 2:53 am GMT · 8 comments

Recently, I told the story here of Louis Piro, a Mountain View barber who made millions by plowing every dollar he could save into the shares of growing companies that paid generous dividends. Following is another uncharacteristically bullish column that I wrote for the Sunday San Francisco Examiner around that time, in the late 1990s. It ran under the headline “New Global Middle Class Fuels Stocks,” and its thesis is that U.S. multinationals stood to benefit hugely from the rapid rise of an Asian middle class.

This scenario was delayed by the collapse of the Thai baht in 1997 and the severe Pacific Rim recession that followed. It now looks like it will be delayed even longer by a looming :

Second Great Depression in the U.S.  You can judge for yourself whether such optimism is still warranted

Petronas-small3

U.S. stocks have been in a scorching, vertical climb for months, confounding the bears and effortlessly vaulting the immediate expectations of the most ardent bulls. What factors might account for this powerful rally? Could there be forces at work besides the steady » Read the full article


TODAY'S ACTION for Tuesday

Night Baseball

by Rick Ackerman on September 8, 2009 4:26 am GMT

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Rick's Picks for Tuesday
$ = Actionable Advice + = Open Position
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All Picks By Issue:

ESU09 – E-Mini S&P (Last:1019.25)

by Rick Ackerman on September 8, 2009 3:34 am GMT

The futures are off a couple of points Monday evening, but they’ve already divulged buying interest by trading a full point above the 1022.00 midpoint resistance show in the chart. If they should break decisively above it on Tuesday, that would signal upside potential over the near term to as high as 1053.00 – equivalent to a 250-point rally in the Dow.

GCZ09 – Comex December Gold (Last:998.00)

by Rick Ackerman on September 8, 2009 3:58 am GMT

With the G-20 meeting coming up in Pittsburgh at month’s end, a breakout by gold above $1000 right now would be about as welcome as an elephant stampede at a garden party. It should therefore be an interesting month, assuming the central-bank conspiracy to suppress gold prices is operating at full strength in the weeks ahead.  I’ll stick with the 1074.50 minimum upside target nonetheless, but I’m making no guarantees above that Hidden Pivot.

DXY – NYBOT Dollar Index (Last:77.99)

by Rick Ackerman on September 8, 2009 4:09 am GMT

Considering that the Dollar Index broke down decisively in early August by smashing the watershed low at 77.69 recorded nearly nine months earlier, the action recently has been pretty copacetic. It suggests that the dollar is being easily supported at these levels, but only because there are no sellers bold enough to challenge the central banks’ resolve. If and when that happens — signaled, perforce, by a two-day close beneath 77.54 – the futures will be on their way down to at least 75.57, the nearest Hidden Pivot of significance on the daily chart.  Otherwise, it’ll take a pop to 89.90 to turn this chart bullish for the first time since last February.

DIA – Diamonds (Last:94.50)

by Rick Ackerman on September 8, 2009 4:14 am GMT

We took a small speculative position on Friday’s close, buying four September 93 puts (DAVUO)  for 0.86 apiece. I’ll recommend closing them out at-the-market if the Diamonds are trading 94.60 or higher an hour into the session. Otherwise, you can offer two to close for 1.16, day order. _______ UPDATE (11:22 a.m.):  The post-Labor Day surprise we’d anticipated was not to be, so we exited our puts for 0.63, realizing a trading loss of $92 on the position.  The fact that the market passed up a perfect chance to  catch investors with their pants down and is headed higher on the first day of the new season suggests that it will continue in bullish mode for a while, at least.  If we are to look now for an ”October Surprise,” the trick will be to determine which would be the more surprising: a melt-up or a melt-down?

$NFLX – Netflix (Last:421.86)

by Rick Ackerman on July 28, 2014 4:32 am GMT

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$+SLW – Silver Wheaton (Last:26.71)

by Rick Ackerman on July 28, 2014 4:16 am GMT

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$GCQ14 – August Gold (Last:1303.80)

by Rick Ackerman on July 28, 2014 4:06 am GMT

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A major top?  It’s certainly conceivable, since the futures peaked last week within 1.25 points of a compelling rally target I’d spotlighted at 1984.50. Although this Hidden Pivot resistance looked very short-able, I have my doubts that it will stand for long as the all-time high. The target’s main value lay in its clarity, and in that respect it did not disappoint us.  As you can see (inset), bulls exceeded it by a mere inch before diving — so far — 22 points. Subscribers who used the target to get short should have covered at least half of any positions by Sunday night and deployed a generous trailing stop for what remains. If you prefer using a stop-loss based on impulse legs, put it at 1979.25, just above a small peak on the hourly chart that was recorded Friday on the way down.

As GDXJ was working its way south from around $43, my bearish forecast called for a washout low at exactly 40.42, a Hidden Pivot support of great clarity. I’d suggested buying down there ‘aggressively’ and with an ‘absurdly’ tight stop-loss.  This advice would have paid off handsomely for anyone who followed it, since the stock trampolined 64 cents yesterday off an actual low of 40.43, a penny from my target. Since a subscriber reported doing the trade as advised, I’m establishing a tracking position for the further guidance of all who may have gotten long. (He reported having bought 1000 shares off a 40.44 bid, but I’ll assume a more conservative 400 shares.)  Accordingly, I’ll recommend exiting half the position on Friday’s opening if you haven’t done so already.  We’ll impute any profits thereof to the cost basis of the 200 shares that will remain. _______ UPDATE (July 27, 9:48 p.m. ET): Exiting 200 shares on Friday’s 41.20 opening leaves us with a tracking position of 200 shares whose imputed cost basis is 39.66.  Exit another 100 shares on today’s opening and tie the rest to an impulse leg-based stop-loss on the 15-minute chart.  At the moment, that would imply bailing out on an uncorrected dive touching 41.73. ______ UPDATE (July 28, 11:46 a.m.):  We got sleazed when DaBoyz opened the stock on the so-far low  of the day, 42.40.  The good news is that such shakedowns usually occur because the smart money is trying to buy the stock.  We now hold 100 shares with an effective cost basis of 37.25.  For the time being we’ll let it run.

$+PCLN – Priceline (Last:1238.98)

by Rick Ackerman on July 24, 2014 12:54 am GMT

A subscriber reported success yesterday legging into the 1340/50/60 August 16 call butterfly that I’d advised. He did so 32 times at no cost, as suggested, but it took a $10 move in the stock between legs to get filled so advantageously. His maximum profit would be $32,000  with the stock trading at 1350 come August 16.  Since he owns the position without cost, no loss is possible even if PCLN should all to zero or rally to $1000. We’ll do nothing further for now, but I’d suggest that those of you who were unable to buy the spread keep trying.  We’ll shoot for a partial profit if the stock rallies $40-$50 in the next few weeks but otherwise do nothing further. I’ve reproduced a chart that shows why our expectation of a $120 rally from current levels, to a 1358.18 Hidden Pivot target, is not exactly farfetched.  To that end, a pop above the 1270.59 midpoint pivot would be most encouraging.

$+TLT – Lehman Bond ETF (Last:114.32)

by Rick Ackerman on July 23, 2014 5:36 am GMT

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$EURUSD – Euro/USD (Last:1.34302)

by Rick Ackerman on July 23, 2014 12:01 am GMT

I haven’t tracked currencies that closely, but because they tend to move very precisely to Hidden Pivot targets, traders should consider exploiting them whenever possible. Notice how EUR/USD has broken beneath a midpoint Hidden Pivot at 1.34841 after noodling around near that pivot for a few hours on Thursday. This suggests that it is bound for D=1.34197, at least.  You can bottom-fish there with a stop-loss as tight as 3-4 ticks.  Notice as well that there are two slightly higher possibilities for point ‘A’.  The correction targets they yield lie, respectively, at 1.34114 and, worst case, 1.33992.  I expect these numbers to work very precisely, so use them in whatever way suits you best.  Note as well that a last-gasp rally to p=1.34738 after EUR/USD has fallen a bit would be short-able. _______ UPDATE (July 24, 5:35 p.m. EDT):  Yesterday’s short-squeeze feint topped precisely at a midpoint Hidden Pivot (see inset, a new chart) that was originally support but which is now resistance. This price action confirms the pattern we’ve chosen as well as its ‘D’ target at 1.34197. At least one subscriber has confirmed getting short in the chat room.  _______ UPDATE (July 27, 10:43 p.m.):  Friday’s low occurred at 1.34206 — 0.00009 above our 1.34197 target.  Shorts should have covered there, but if you were able to bottom-fish the low and catch a piece of the 144-tick rally that ensued, please let me know in the chat room and so that I can establish a tracking position for your further guidance.

September E-Mini Nasdaq (Last:3965.00

by Rick Ackerman on July 15, 2014 4:21 am GMT

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SIDE BETS for Tuesday

UNG – U.S. Natural Gas Fund (Last: 9.59)

by Rick Ackerman on September 8, 2009 4:20 am GMT

Look at Friday’s rally on a daily chart before you get too excited.  This glue horse would need to print 10.76 today to give bears reason to be nervous. Upside potential for the moment looks to be only 9.74, but bulls would get a recharge if they can push that Hidden pivot resistance aside.


This Just In... for Tuesday

The One Trading Myth You Should Know…

by Rick Ackerman on September 8, 2009 8:45 pm GMT

From one Brian Heyliger, editor of Market Trigger Alert, I received a promotional letter — “The One Myth About Trading You Should Know” — that deserves to be widely shared. It offers some very useful tips on how to get your mind right for trading regardless of what system you use :

I want to tell you something about trading you won’t hear often…

Trading has nothing to do with indicators and everything to do with you.

Let me explain…

The easiest things to learn are indicators and setups, but they have nothing to do with trading. You can memorize them, you can buy them, you can even program your computer to alert you when they occur. But the Achilles Heel of trading is this: YOU!

There are numerous sites and gurus touting their products as the “Holy Grail” of making money in the markets. “Just buy my trading system and you’ll make a million.” Well, that’s not actually true, because winning, stand-alone trading system won’t work if you are broken…

To trade a system successfully – whether it’s something you’ve purchased or developed yourself – you need to have the correct mindset.

The Paradox of 
’Holy Grail’ Systems

This may surprise you, but you can learn a perfectly good trading system, trade it, and lose money, while someone else trading the very same system makes a fortune.

The only difference is between the winner the loser is the person trading – that’s it! The traders who lose simply aren’t following the rules of the trading system they designed (or purchased), unlike the winners.

The key to making a system work is developing the discipline to follow the instructions. This is the hardest part about trading. Let’s illustrate this with an example …

You just lost $1,000 on the last trade and you’re unhappy. That loss is bothering you and you’ve begun to doubt yourself (and the system you’re using). Is the system really effective any more? Have the market conditions changed so this system no longer works? Do I need a new system? These and other thoughts will be running through your mind just as…

Your system tells you it’s time to buy. Guess what — losing traders won’t buy! Their emotions are so drained from losing $1,000, they just don’t have the emotional capital left to enter the next trade – which very well might be a big winner.

The winning traders remain confident even after a loss. They only doubts are to evaluate whether or not they truly followed the system during that loss, and (if not) how they must be more disciplined to ensure more accurate – and profitable – trading. If they did follow the system and lost, they chalk it up to ‘the law of averages’ and look forward to the next trade which has a high probability of being a winner.

You see, a winning trading system is a profit generating business. The more business you can do, the more profit you can generate. Sure, you have some ‘overhead’ (i.e. losses) but in a profit generating business the more ‘customers’ (i.e. valid trade signals) the better.

Three Rules For 
Better Trading

Here are few things you can do to help you manage your trades better, and not succumb to the emotional drain that will keep you from taking the next trade:

Don’t look at daily profits, look at them over time. Who cares if you lose $1,000 today, you could make $2,000 tomorrow. That’s still $500 a day over the two days!
Plan for losses. They will come, but know they’re only temporary.
Plan your trades and trade your plan. This is the most important part of trading. If you start the day with a plan, but don’t follow it, you might as well throw darts at the Wall Street Journal.

When trading a system, constantly remind yourself you’re playing the odds. That means you’re going to lose some days, but if the system you’re trading is profitable, you’ll win more often than you lose and make a killing along the way.

A Cautionary Note

That said, there are a lot of systems out there that just plain don’t work.

And I’ll tell you, the majority of them don’t. I know because I’ve tried them.

So here’s the pattern: find a system that seems to work, backtest it, and become comfortable that it actually does work before you put a single dollar on the table. If you want to study one thing about a system, study the losers, not the winners. Then everything else will fall into place.

I have a system I’ve designed specifically for this purpose – to help new traders make it to six-figure status very quickly. It’s designed to make you the most amount of money and offer the smallest learning curve of any trading system out there. The rules are very black and white, and very easy to learn.


Hidden Pivot Webinar & Tutorials
The Hidden Pivot Webinar is 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. The next Webinar will take place on August 13-14, 2014. For more information, or to register, click here.