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Gold Just Messing with Bankers’ Heads

by Rick Ackerman on September 15, 2009 2:27 am GMT · 8 comments

Gold hasn’t made much headway since the beginning of the month, when COMEX futures surged $50 in the space of two days. With the dollar suffering from the vapors, there’s no compelling reason why the December contract should have loitered near $1000 ever since.  Granted, that’s a nice, round number, and it probably works smoothly with put-and-call hedges that allow bullion dealers to borrow as much of the stuff as they’d care to without risk. It is the same thing we see on expiration Fridays in the equity options market. When a stock gets “pegged” to a strike price, it’s possible for even small players to transact » Read the full article


TODAY'S ACTION for Tuesday

A do-it-yourself gold trade

by Rick Ackerman on September 15, 2009 3:53 am GMT

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Rick's Picks for Tuesday
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ESU09 – E-Mini S&P (Last:1043.00)

by Rick Ackerman on September 15, 2009 2:43 am GMT

That 1053.00 target may be so stale by now that it can be shorted without fear of bumping heads with amateur riff-raff.  I won’t get in your way by suggesting the usual niggling stop-loss, but let me reiterate that the target itself is as clear and compelling as can be — a bet-the-ranch number if it had been hit last week on the the first try. If you’re superstitious and would rather play the December contract, the equivalent target, a Hidden Pivot, lies at 1048.25 ______ UPDATE (10:16 a.m.):  This trade worked beautifully, since the futures have so far fallen 11.25 points after topping at exactly 1053.25 an hour before the day session began.  You’re on your own from here, but if you initiated the trade on multilots, save some contracts for a potential four-bagger.  

GCZ09 – Comex December Gold (Last:1009.40)

by Rick Ackerman on September 15, 2009 3:47 am GMT

It’s not often that we find potentially great camouflage on the hourly chart, but if December Gold moves as I have hypothesized in the accompanying chart, it will set up a beautiful entry opportunity at ‘X’ that seems very likely to give buyers a pleasurable ride.  I am not going to complicate my instructions by telling you how to get long in a hundred words or less, but will instead leave it up to pivoteers in the chat room to do the explaining if and when opportunity knocks Tuesday morning. _______ UPDATE (10:05 a.m.): Gold eased lower overnight, and so the entry opportunity we were looking for did not materialize.  The weakness hints of more downside to 988.40, or to 988.50 if any lower.  Alternatively, an upthrust that touches 1006.40 would put bulls back in the driver’s seat. _______ FURTHER UPDATE (2:13 P.M.):  A trade flagged in the chat room is working nicely for anyone who went long mechanically by-the-numbers.  On the 15-minute chart, using the one-off ‘A’  at 995.90 that was advised, the target lies at 1011.30 — two ticks from where the futures have just made a (presumably) short-term top.

GS – Goldman Sachs (Last:177.57)

by Rick Ackerman on September 15, 2009 4:12 am GMT

The 192.91 target given here earlier will make for a juicy shorting opportunity if and when Goldman gets there, but I’m reluctant to play the upside unless we can get in at a retracement target. The best such opportunity tied to a Hidden Pivot would be down near 175.05, the midpoint sibling of 192.91.

DXY – NYBOT Dollar Index (Last:76.71)

by Rick Ackerman on September 15, 2009 4:17 am GMT

The Dollar Index’s fall to a 75.57 target has been so long in coming that we should be on the alert for a reversal before it is reached. On the hourly chart, this would be signaled by a 77.25 print, but if 77.38 is touched, bears had better dive for cover.

$GCZ14 – December Gold (Last:1289.20)

by Rick Ackerman on August 29, 2014 3:57 am GMT

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$ESU14 – Sep E-Mini S&P (Last:1990.00)

by Rick Ackerman on August 29, 2014 3:35 am GMT

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$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 cents0, 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.


SIDE BETS for Tuesday

SIZ09 – Comex December Silver (Last (16.665)

by Rick Ackerman on September 15, 2009 3:59 am GMT

December Silver bettered our bullish benchmark at 16.730 by a single tick yesterday, hinting of more upside to come. If so, the futures 16.850 will need to touch 16.850 today to demonstrate  their eagerness to challenge last Friday’s 17.015 peak. Once above it, the futures would be an odds-on bet to reach a minimum 17.275 over the very near-term.


This Just In... for Tuesday

The Collapse of a Presidency

by Rick Ackerman on September 15, 2009 5:56 pm GMT

Writing at Politico.com, here’s Jeremy Lott on the increasingly likely collapse of the Obama presidency:

When he ran for president, George W. Bush promised to be a modest reformer at home and a humble representative of the United States on the world stage. The Al Qaeda-organized-and-funded terrorist attacks of eight years ago changed all that. During his presidency, Bush created massive new government bureaucracies, sent troops into two wars and threatened more as part of America’s war on terror.

Barack Obama’s initial approach to the office of the presidency has been as grandiose as Bush’s was restrained. It’s not hard to recall that he ran as a transformative candidate, promising sweeping, though somewhat fuzzy, “change” during the campaign.

For the first several months of his presidency, Obama has labored to deliver on that pledge. He pushed a controversial stimulus bill through Congress to help rev up the economy, turned Bush’s reluctant bailout of Chrysler and General Motors into a giant government auto buyout and appointed a record number of “czars” to help regulate bureaucracies in both public and formerly private sectors.

Then, Step 2. Obama is trying to fundamentally alter the American economy by backing sweeping environmental, labor and health care legislation. He wants to change the way Americans consume energy, unionize and see their doctors.

So far, he’s failing miserably. Consider the following:

• Cap-and-trade legislation had to limp over the finish line in the House of Representatives with the help of a few moderate Republicans, who then caught holy unshirted hell from their constituents. Environmental legislation generally has taken a drubbing in public opinion polls when people consider how costly it is.

• The Employee Free Choice Act may be stripped of its “card check” provision in the Senate, which would effectively do away with secret ballots for unionization elections. Even in its watered-down form — which still includes highly objectionable, mandatory, binding so-called gunpoint arbitration and makes no concessions to employers who don’t want to have to prop up teetering union pensions — it might not pass the Senate. And the leadership of the House has refused to touch it until the other chamber has made up its mind.

• On health care, forget the rage set off by private citizen Sarah Palin tweeting about “death panels.” Forget the misleading talk about whether there will be a “public option.” (The ever-evolving plan is one giant public option, folks.) Forget the angry voters who crowded into the town halls during the August recess. Forget that a number of Democratic senators and Sen. Joe Lieberman (I-Conn.) are still not willing to sign on to a bill. Right now, even after Obama’s address to the joint session of Congress last week, it’s possible Democrats don’t even have the votes in the House — where they currently enjoy a 77-seat majority.

It’s entirely possible — nay, likely — that Obama will lose on all three big issues. He’ll probably take that personally. As he has pushed for the passage of his reforms, his public approval ratings have taken a beating, and voters have started to trust the Republicans more than his party on a host of issues.

The question that most political handicappers are considering right now is not “Will Republicans make gains at the midterm elections?” but “How large will those gains be?”

What all this means is, barring some unforeseeable world event, Obama’s will probably not be a historic presidency. He will have some successes and a lot of failures. His opposition won’t roll over, and his party will refuse to go along with his more costly, and thus risky, schemes. He won’t coast to reelection.

So Obama now has the chance to be the sort of president Bush would have been if the World Trade Center towers had not come down. Here’s hoping he makes the best of it.


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