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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
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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?

$CLV14 – October Crude (Last:93.76)

by Rick Ackerman on August 28, 2014 1:13 am GMT

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$PCLN – Priceline (Last:1260.77)

by Rick Ackerman on August 28, 2014 1:00 am GMT

If the lunatic stocks are about to lead the broad averages higher, we should see Priceline bounce sharply from the 1259.21 midpoint support shown. Yesterday’s low came within 38 cents of this Hidden Pivot — close enough for the target to be considered fulfilled. Any further slippage, however, and its ‘D’ sibling at 1224.45 will be in play. This would imply that the stock market itself is likely to go nowhere, or possibly down, in the days ahead.  The stock would become shortable on a decisive breach of the red line (i.e., a breach of perhaps 0.30-0.60 cents), but if you plan on getting short for the potential $35 ride south, you should initiate the trade on the 5-minute chart or less, using a corrective pattern that would subject you to no more risk theoretically than perhaps 0.15 per share. If the trade works and you are still short when 1224.45 is reached or closely approached, reverse the position and buy at the target aggressively using a tight stop.

$+TSLA – Tesla Motors (Last:264.09)

by Rick Ackerman on August 26, 2014 7:35 am GMT

Tesla’s bullish rampage looks like it could hit 305.55 on the next big thrust.  Accordingly, I’ll recommend bidding 1.54 for the October 3/Sep 5  300 calendar spread 8 times, good till Friday. You should adjust your bid by 0.05 up or down for every 50 cents the stock moves above or below 262.50.  Please note as well that a pullback to the red line, a Hidden Pivot midpoint at 241.39, should be regarded as a buying opportunity, especially the calendar spread (albeit it at a much lower price). _______ UPDATE (August 26, 11:43 p.m. EDT):  Volatility has gotten crushed, and so you’re doing well if you buy the spread now for 1.34 (with TSLA at 262.00).  Since the spread price can fluctuate wildly from one day to the next, I’ll suggest that you recalibrate it hourly if you’re a buyer, using a spread price midway between bid and offer as “fair value.”  It has a delta value of around 9 at the moment, so you should adjust your bid for the spread by 0.01 for each 0.11 move in the underlying. _______ UPDATE (August 28, 9:45 p.m.):  With the Sep 5 calls melting away, the fair price for our spread must be recalculated several times daily by anyone seeking to buy it. It was a decent buy at Thursday’s close for around 1.20, but it could shed yet another 0.15-0.25 as the week ends.

$SLW – Silver Wheaton (Last:24.89)

by Rick Ackerman on August 25, 2014 12:05 am GMT

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$AAPL – Apple Computer (Last:100.89)

by Rick Ackerman on August 21, 2014 3:16 am GMT

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$+TLT – Lehman Bond ETF (Last:117.72)

by Rick Ackerman on August 20, 2014 4:59 am GMT

Subscribers are working two bullish calendar spreads (x16), but I would suggest increasing the size of the position if TLT corrects down to the 115.18 target  shown.   For now , we are long September 20 118 calls against short August 19 118 calls that we will roll into August 29 calls this Thursday and Friday.  We’ve already done the roll twice, reducing the cost basis of the spread to 0.04. This week’s roll will entail covering (buying back) the short calls and shorting a like number of August 29 calls, effectively selling the August 22 118/August 29 118 calendar spread.

It was marked on Tuesday at 0.17, off a 0.26 offer, but any price higher than 0.04 will effectively turn the position we’ll have  – long the Sept 20 118/August 29 118 calendar — into a credit spread.  This means we can’t lose – will make a profit no matter what TLT does.  Ideally, come September 20 , TLT will be sitting at 118, our spread will be trading for around 0.50, and we’ll be carrying it for a credit of perhaps 0.50.  The imputed profit would be  $1600 — not bad, considering our risk is already close to zero.

My long-term outlook for T-Bonds is very bullish, a view that goes sharply against a consensus which clings to the belief that interest rates – and the stock market — can only go up.  That is a bet we should be eager to fade. We may have a chance to do so at still better odds if T-Bonds continue to  sell off  on the manufactured idea that the Jackson Hole conference will open the floodgates for more stimulus and inflation. _______ UPDATE (10:38 a.m.):  The Sep 20/Aug xx calendar spread is recommended at this point only for those who did the original spread, since there’s not enough time left on it to roll its cost basis down to zero or less (i.e., a credit). If you are new to the spread, try buying the Nov 20/August 29 calendar for 0.90 with TLT trading around 115.80.  The spread has a delta value of 0.20, implying that being long one spread is equivalent to being long 20 shares of stock.  This means that, using a spread price of 0.90 as a benchmark, you should adjust the price you pay for it by one penny, up or down, for each 5 cents that TLT moves away from 115.80. ______ UPDATE (August 23): The strategies detailed above continue to rack up solid gains for subscribers that have come with minimal risk. If you have yet to take a stake, I would strongly urge you to do so, and to monitor reports in the chat room from those who are working the order. If there are any questions about how, and when, to initiate a trade, please don’t hesitate to ask me or others about it. _______ UPDATE (August 26, 12:01 a.m.): These spreads are working well, to put it mildly — especially for subscribers who increased their position size as suggested whenever TLT was weak.  Check my August 26 posts in the chatroom for further, detailed guidance.  In brief, I am suggesting covering half of the 118-strike spreads for 0.90 or better this week, and to roll the short side of the Nov 22 120/Aug 29 120 to Sep 5. _______ UPDATE (August 28, 12:43 p.m.): The August 29 118 calls look likely to finish in-the-money. To avoid being exercised, make sure you roll into the September 5 calls before noon EDT Friday.  Currently, with TLT trading 119.09, the September 5 118/August 29 118 calendar spread is a decent sale for around 0.28.  Keep in mind that the spread could widen, to our great advantage, if TLT pulls back, since the August 29 calls we are short will shed value more precipitously than the September calls that we continue to hold as the long side of our position. Even so, you could do worse than take the 0.28 now and run, since it would simply fatten the premium we have taken in on the weekly short, increasing our net credit.  With TLT rallying liking a moofoo, the weekly credits will be more significant to our final gain than the calendar spread itself at expiration.

+GDXJ – Junior Gold Miner ETF (Last:42.06)

by Rick Ackerman on September 2, 2014 12:03 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 one-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 October 16, 2014. For more information, or to register, click here.