July 23rd, 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.

$TLT – Lehman Bond ETF (Last:115.36)

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

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$PCLN – Priceline (Last:1229.21)

by Rick Ackerman on July 22, 2014 5:10 am GMT

The stock’s stall two weeks ago near a 1268.66 midpoint resistance shown suggests it could get to 1354.32 on a breakout.  Although we cannot predict with confidence if or when this will happen because PCLN has been meandering sideways for the last five weeks, as a riskless play I’ll suggest buying the August 16 1340-1350-1360 call butterfly spread for ‘even’ 32 times. This means you would short two 1350 calls, buy one 1340 call and one 1360 call for no debit or credit.  In practice the easiest way to do this will be to buy the 1340/1350 call spread 1:1 at targeted swing lows, and to sell the 1350/1360 call spread 1:1 at targeted highs. If you do either and then get a move your way of as little as perhaps $2.50, legging into the ‘fly for free (or even a small credit) would be relatively easy. The maximum profit on this position would be 32 x $1000 = $32,000, although in practice we’d be doing well to come away with half that much if the stock were to rally to 1350 by August 16. ______ UPDATE (7:50 p.m.): Another way to leg into the spread would be to sell the 1240/1250 ratio 1:2 when PCLN is making a short-term top, then to buy a 1260 later, at a swing low.

$GCQ14 – August Gold (Last:1311.60)

by Rick Ackerman on July 22, 2014 1:29 am GMT

The futures looked like they could go either way as Monday’s session drew to a close. However, the stall within 0.70 of the 1318.30 midpoint resistance I’d flagged implies that a decisive move past it would reach its D-target sibling at 1331.60. Alternatively, my worst-case target for the near term would be the 1278.20 Hidden Pivot support in the lower-right quadrant of the chart — or possibly even 1271.70 if any lower.  The accuracy of this target would be affirmed by a bounce, possibly tradable, from within two or three ticks of the 1302.00 midpoint support. ________ UPDATE (9:57 a.m. EDT):  Gold has bounced $14 this morning from a low just two ticks (0.20) from the 1302.00 midpoint pivot flagged above. Now, if the futures breach the support, we’ll know EXACTLY where they are headed. _______ UPDATE (July 23, 12:01 a.m.): Someone in the chat room said that because everyone seems to be bearish on gold right now, perhaps we should take the other side of the bet.  I’m a bit bearish myself, and thus this response: “Rather than take chances and let gold disappoint us for the zillionth time, we should simply stipulate that the August contract close above 1318.90 before we get excited. That’s the midpoint resistance, on the 180-minute chart, of a=1292.60 on 7/15; b= 1325.90 on 7/27; and c=13-02.20 on 7/22. At that point, I’d lay even odds of a move to at least 1335.50; above 1337.00, the futures would be a good bet to hit 1381.40.  Whatever happens, bulls will have to prove their case.

$+CLQ14 – August Crude (Last:104.78)

by Rick Ackerman on July 21, 2014 12:03 am GMT

Crude futures have been pretty whacky lately, but not so whacky as to fool us if we are monitoring the lesser charts. Notice that the recent high fell within 23 cents of the 103.71 target. Although we usually allow 21 cents of leeway, this is still close enough to affirm that price action in this vehicle is both predictable and tradable. Accordingly, traders can use the downtrending abc shown to bottom-fish at either the p=102.71, or at D=102.09.  If the bull trend begun from last Tuesday’s low is going to continue, we should see the upward reversal occur from p or very near it. Please note that despite crude’s recent plunge, I still have significantly higher targets outstanding, the first of which is 109.21, basis the August futures. _______ UPDATE (4:12 p.m. EDT): Wowie! The futures trampolined $2.22 from within 6 cents of the 102.71 correction target flagged above.  If you caught a ride from near the low and still hold contacts, please let me know in the chat room so that I can establish a tracking position for your further guidance.

$ESU14 – Sep E-Mini S&P (Last:1981.50)

by Rick Ackerman on July 21, 2014 12:01 am GMT

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$SLW – Silver Wheaton (Last:26.72)

by Rick Ackerman on July 17, 2014 12:05 am GMT

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$NFLX – Netflix (Last:452.00)

by Rick Ackerman on July 9, 2014 3:25 am GMT

Netflix’s so-far $37 selloff has followed a peak last week at 475.87 that slightly overshot a Hidden Pivot at 474.50 I’d characterized as ‘a big-picture target where an important top is even more likely.’ A chat-roomer who evidently took this prediction to heart reported buying puts last Thursday for 1.24 that he cashed out for 8.90 yesterday. This could be just the start of NFLX’s comeuppance for all those who inflated this gas-bag to undeserved heights. If you took a position and are still holding it, please let me know in the chat room and I will update guidance. For now, though, let me suggest that you take profits on half of any short position entered near the recent top. _______ UPDATE (July 10, 10:23 p.m.): Bears failed to achieve a Hidden Pivot target yesterday, presumably because DaBoyz shook the stock down so hard on the opening bar that it exhausted sellers prematurely. The missed target suggests that traders will enjoy decent odds bottom-fishing the midpoint pivot shown at 433.62 (see inset, a new chart) with a stop-loss as tight as 8 cents. If it’s hit, expect the selling to continue down to at least 423.05, a Hidden Pivot that can be bottom-fished with as tight a stop-loss as you can abide. _______ UPDATE (July 14, 11:07 p.m. EDT): A turn from 428.20, precisely between the two pivots flagged above, left our bid high and  dry.  The bull leg that has followed could be the start of a rally cycle with the potential to reach 486.86. First, though, let’s see whether buyers can tackle a midpoint pivot at 457.53 that is associated with the target. _______ UPDATE (July 16 at 6:47 p.m.): Let’s not overlook the downside — specifically, the 433.69 midpoint pivot and its D sibling at 411.67.  Bears can short the break for a move to either, and both can be bottom-fished with the tight stop-loss you can abide. ______ UPDATE (July 22, 12:15 a.m.): The stock turned higher from $2 above the midpoint support, implying that bulls are about to dominate once again.  Call prices are on the moon, however — way too expensive for a straight directional bet. Instead, I’ll suggest buying the August 2 – July 25 calendar spread eight times for 1.50, day order, contingent on the stock trading 451.00 or higher. Please report any fills in the chat room. _______ UPDATE (July 22, 12:05 p.m.):  With today’s huge air pocket, the stock obviously remains in the grip of DaBoyz. My assumption will always be that steep declines in NFLX are brazen shakeouts, engineered by strong hands to steal stock at fire-sale prices from weak hands. In this instance, the downdraft appears likely to hit 413.00 before DaBoyz run it up again. If and when that number is hit, you can bottom-fish there with the tightest stop-loss imaginable. (Note: I’ve revised the target downward by 0.96 since the original update. Also 435.25 is the midpoint pivot and therefore worth a tightly stopped short on a rally to it.)


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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