August 1st, 2014
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We’ve always believed that the stock market’s ups and downs are driven not by anything so mundane as news events or the economy, but by the same mysterious cyclical forces that govern the physical universe. Nevertheless, two rapidly evolving news stories threaten to abruptly reverse Wall Street’s heedless bear rally, which recently entered its seventh month.

The first story concerns the impending collapse of the Obama presidency. Although he ran a very impressive campaign, Mr. Obama appears hell-bent on committing political suicide.  The President is clearly obsessed with radically revamping the country’s health » Read the full article


TODAY'S ACTION for Monday

A cautionary note…

by Rick Ackerman on September 14, 2009 4:48 am GMT

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Rick's Picks for Monday
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ESU09 – E-Mini S&P (Last:1039.00)

by Rick Ackerman on September 14, 2009 3:47 am GMT

The futures are getting whacked a bit harder than usual Sunday night, hinting that it may be more than a garden-variety shakedown.  That doesn’t mean DaBoyz will not find a price at which they can rape fearful sellers — only that the process may require a little more sneakiness than usual. In any event, the hourly chart will remain undisturbed as long as the futures hold  above 1027.00. A print below that number would create a bearish impulse leg, however, and it would be especially significant because it would follow a peak that had missed a Hidden Pivot target (i.e., 1053.00) by nearly five points.

GCZ09 – Comex December Gold (Last:1004.60)

by Rick Ackerman on September 14, 2009 4:08 am GMT

Gold is feigning weakness Sunday night — or perhaps not — but its downward drift will have no significance, even on the lesser charts, unless it takes out a Hidden Pivot support at 1001.50.  Ordinarily that would be a good spot to try bottom-fishing, but not this time due to it close proximity to a visually obvious low made Friday on the way up. There may nevertheless be an opportunity for night owls to board with “camouflage,” so I’ve included a chart that shows how, just in case.

GS – Goldman Sachs (Last:175.30)

by Rick Ackerman on September 14, 2009 4:22 am GMT

Because I’ve hung out a bullish target in the $190s, we should watch closely to see how stubbornly the little sonofabitch bucks weakness in the broad averages.  We may have an opportunity to observe and learn Monday morning, since Goldman had already begun to sell off on Friday, well before there were any clues that stocks would get hit Sunday night. If the market drags GS lower, the first Hidden Pivot support where we could try bottom-fishing would be at 172.77, stop 172.66. You’ll be on your own if the order fills and initially goes your way.  You should also be watching for signs that a recalcitrant Goldman is keeping the market from falling apart, as might be the case. _______ UPDATE (10:28): After falling shy of our downside target by a relatively paltry 40 cents, Goldman suspiciously did NOT participate in this morning’s phony selloff, thereby telegraphing the broad recovery attempt currently under way.

TBT – Lehman Ultrashort Bond ETF (Last:45.98)

by Rick Ackerman on September 14, 2009 4:36 am GMT

The rally in the long bond must have a little ways to go, since this inverse vehicle has an unachieved downside target at 43.18, roughly 6 percent below these levels.  If TBT gets there it could provide an excellent camouflage opportunity for bottom-fishing, so stay tuned. Note how the target falls in-between two prior lows, one of them an important one.

$GCZ14 – December Gold (Last:1283.60)

by Rick Ackerman on August 1, 2014 2:30 am GMT

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$ESU14 – Sep E-Mini S&P (Last:1927.50)

by Rick Ackerman on August 1, 2014 1:42 am GMT

Yesterday was the first time in recent memory that many of those who ‘bought the dip’ got creamed.  Traders should keep in mind that every bearish target implies a potentially profitable short with-the-trend as well as a bottom-fishing opportunity at the target.  In a bear market, the best place to initate the short will often be on the retracement rally to the midpoint pivot rather than at the conventional point ‘x’ of the downtrend.  This will hold true for the longer time frames as well.  Assuming we’ve entered a bear market, corrective rallies will tend to fail at their midpoint pivots, and ABCD downtrends to reach or exceed their ‘D’ targets.  My experience with the dot-com boom-and-crash is that heightened volatility makes swing highs and lows even more predictable than wafting rallies or sideways chop.

Concerning this vehicle, most immediately, the night shift has pushed the futures to the exact midpoint resistance (p) of  the minor abc uptrend shown. If  p holds, this would be as expected. As I’ve implied above, bear markets tend to produce corrective rallies that get no further than p. Night owls may not get much movement in off-hours trading, but the moves themselves will be more predictable and reliable than what you’re used to.

$NFLX – Netflix (Last:431.51)

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

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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.  In any event, I am tracking a 100-share position with an effective cost basis of 37.25.  For the time being, let it run. _______ UPDATE July 29, 7:23 p.m. EDT): Let’s turn the position into a covered write if GDXJ slips beneath 42.25 today (see inset, a new chart).  Specifically, you should short one August 16th 41 call for each hundred shares you own. Don’t simply bang out a sale on the bid when the stock hits 42.24, since you could get clipped for as much as 0.20-0.25 on the spread that way.  Instead, you should be deliberate and relaxed about the short sale of the call, since we are in the catbird’s seat and have little to lose by taking in some option premium at this point.  Shoot for a price midway between the bid and offer, and don’t rule out the possibility that GDXJ could snap back above 42.25 even in the process of breaking down. _______ UPDATE (July 30, 2:32 p.m.): _______ UPDATE (2:30 p.m. EDT):  I’ve yet to hear from anyone, but a ‘relaxed’ short could have been done anywhere between 2.03 and a current bid/offer of 2.45/2.90.  I’ll use a cost basis 2.55, about midway between, unless I hear otherwise.

$+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. ______ UPDATE (July 28, 7:46 p.m. EDT): Yesterday another subscriber reported legging into ‘free’ butterfly spreads as suggested. Keep trying for at least one more day if you haven’t yet acquired a stake, since the spread will remain cheap as long as PCLN doesn’t blast off.

$+TLT – Lehman Bond ETF (Last:115.40)

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

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$EURUSD – Euro/USD (Last:1.33950)

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. _______ UPDATE (July 30, 2:43 p.m.): The futures have breached the lowest of the targets I’d provide from the lesser charts. This implies that a bigger-picture target at 1.32091 is in play. The chart(see inset, a new one) shows this.

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The Dollar Index turned higher yesterday an inch from a correction target that had been three weeks in coming (see inset). This portends a bullish change for the intermediate term.  The actual target is 79.74, and there is always a chance it will be breached. If so, there’s an alternative target at 79.62, but if it fails as well, especially without a fight, the implication would be more slippage to as low as  78.91, where a key low recorded in early May would thereupon beg to be tested. _______ UPDATE (11:17 p.m. EDT): Yesterday’s low occurred at 79.74 exactly. If the dollar is about to reverse and move higher, it will have to happen here, and now. _______ UPDATE (July 9, 2:33 a.m. ET): The dollar rallied strongly for a few days, but it is still not out of the woods because the move narrowly failed to clear an important ‘external’ peak at 80.38 recorded on 6/26. _______ UPDATE (July 16, 6:55 p.m.): DXY came within an inch of a clear and important Hidden Pivot rally target at 80.60 yesterday (see inset, a new chart). However, it will have to push past it to imply that the rally from the July 1 low (which had been predicted to-the-penny) is more than just a flash-in-the-pan. _______ UPDATE (July 30, 2:53 p.m.): 81.85, here we come!! (See inset, a new chart.)


SIDE BETS for Monday

SIZ09 – Comex December Silver (Last:16.600)

by Rick Ackerman on September 14, 2009 4:43 am GMT

Silver died after topping last week just above a 16.940 target I’d flagged, but the pullback will do no damage to the hourly chart unless it exceeds 15.850 in a downdraft today or tomorrow. Alternatively, the first hint of recovery would come today on a print exceeding 16.730.


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