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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
Catching a ride north with the strategy I advised here yesterday would have required a nimble and alert response in the wee hours; however, the potential short from 192.91, the Hidden Pivot target flagged in the same tout, still beckons. As of early Wednesday evening, the little sonofabitch had wafted as high as 191.50, so there’s not much further to go. To initiate the short, I’d suggest buying two November 180 puts (GPYWP). I’m guessing they’ll be trading for around 4.60, but I’ll suggest monitoring the bid/asked for the Nov 180 puts as Goldman closely approaches the target. You should stop yourself out of the position if the stock trades above 193.10. More-experienced pivoteers can attempt shorting with camouflage after the stock hits or nears the target. This would entail initiating the trade on the first a-b-c pullback from near 192.91.
A less-than-compelling pattern points to 1076.75, but it’ll do for our pecuniary purposes. The target’s midpoint sibling lies at 1059.75, and I can’t help noticing that that’s the precise high so far Wednesday evening. If it’s not just coincidence, this would portend a rather precise pullback from the higher number. In any case, 1076.75 will become the minimum upside projection if and when the futures punch out the lights of the midpoint. Short ’D’ at your complete discretion — or even on a whim, if you dare.
The fact that the dollar has friends in high places, not to mention rumor-mongers to help out whenever the going gets tough, doesn’t seem to be providing the kind of lift the casual observer might expect. Minor rallies have gone nowhere, and they are being met with minor impulse legs going in the opposite direction. The intraday charts don’t provide much clarity, but the daily bars suggest DXY is struggling to avoid the 75.47 target we flagged here a short while ago. Keep in mind that if that Hidden Pivot gives way easily, the next scientifically determined stop on the way down would be 72.93, another number we have in play.
We hold eight bull spreads that have the potential to pay one’s subscription costs for the next six years. We own the spread — long December 12.50 calls, short December 15 calls — effectively for a CREDIT of 0.15 per, since we legged into it at very good prices. This means we stand to make as much as $2120 if the stock goes out 15 or higher at expiration. However, we may have a chance to realize most of that gain well before Christmas, since SLW seems bound at the moment for a minimum 15.31. The higher it goes, the deeper in-the-money both calls will be, and the less time premium we’ll therefore have to pay to close out the December 15s. In practice, the amount of time premium in the December 15 call over and above time premium in the December 12.50 call should roughly equal the value of the December 15 put. This is logical because buying the December 15 put would be one way of locking in whatever profit we have in the call spread with SLW trading above 15.
A side note on gold, culled from Wednesday morning’s tutorial session: If the December Comex contract blows past the 1074.50 target that has served for a while as our minimum upside objective, the next likely stop would be 1134.50. This Hidden Pivot comes from the weekly chart, where A=750.00 (12/05/08). My gut feeling is that 1074.50 will put up enough of a fight to justify profit-taking by long-term bulls.
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SIDE BETS for Thursday
A Hidden Pivot resistance at 452.83 is the next potential resistance above, as well as our minimum rally target for the near term. If it is brushed aside, however, that would portend more upside over the near term to as high as 466.00.
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on 6/30 - 7/1. This 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. For more information, or to register, click here.
Two Mining Stocks with High Leverage
by Rick Ackerman on October 8, 2009 1:36 am GMT · 8 comments
(From our correspondent Chuck Cohen, a NYC-based fianancial consultant who specializes in gold investments, here’s an assessment of two mining companies that he thinks merit the attention of Rick’s Picks readers.)
Let’s look at two exploration companies which are linked by their being undervalued and by their locations in Quebec, one of the most mining-friendly places in the world. Becanse these companies operate in Quebec, the market will assign a premium to their respective share prices. Plus, in both cases the infrastructure is also very positive, a detail not to be ignored. Please remember that for any stocks I recommend, I suggest that you go to their web sites to familiarize yourself with the companies. Don’t be lazy, but be a student of » Read the full article