Member-only content. Please Login or get a free trial of Rick's Picks to view.
COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
The market’s failure to fall yesterday came as a surprise to me, but perhaps because there are no sellers around who still have their genitals, stocks simply needed a day to work off a mildly oversold condition. In any case, heavier-than-usual selling Monday night was creating numerous Hidden Pivot targets below. My favorite is the 1051.00 target of the pattern shown in the chart. The sibling resemblance between k-A and B-C is what drew my eye, and we may get confirmation of this relationship when ES hits the 1077.00 midpoint — my minimum downside target for the near term. Night owls are advised to try bottom-fishing there with a very tight stop-loss, since DaBoyz only rarely take stocks down more than that overnight unless they are expecting a selling avalanche at the opening bell. Keep in mind that the oh-so-coy strategy of the klismaphiliacs who work the night shift is to find a level at which selling dries up, and then to hold stocks at that level or above until the opening bell. Occasionally they guess wrong, however, and they get buried by the unanticipated onslaught of sell-at-the-market orders that have built up just prior to the opening. (Note to Harry and other eagle-eyed pivoteers: Yes, I know the k-A segment I’ve notated in the chart ignores the true point ‘A’. However, when I speak of a sibling resemblance between k-A and B-C, it is the length and breadth of the overall patterns that I am comparing.)
Officially, February Gold is still headed down to at least 1074.50, but in practice it is putting up too respectable a fight for us to consider the target a done deal. Also in practice, the futures could create a potentially explosive impulse leg with a relatively minor thrust. Notice in the chart that there are three peaks, two of them external, that are spaced just $1.60 apart. An unbroken push surpassing all of them would be just the thing to energize bulls, but they would rampage on a breach of peak number four on the same push. Camouflage entry on a pullback from just above #3 might be possible, but any rally above #4 is bound to be noticed. The trick will be to use a hair-trigger buy-stop to enter if there’s a quick, shallow b-c pullback from just above 1104.80. Alternatively, if bullion falls, a minor midpoint at 1089.90 should evince support, although the pivot doesn’t look sufficiently compelling to bottom-fish.
The dollar is taking its sweet old time to consolidate, but there is no mistaking the energy that is building for a follow-through to last week’s impulsive thrust. The main impediment at the moment is a Hidden Pivot midpoint at 78.54. If and when it gets swept aside, look for a run-up to at least 79.05, or perhaps to 79.40 if any higher.
The long-term target at 27.15 that we used to protect our gains on stock acquired for 11.01 seems to have caught a major top very precisely. We bought a put and shorted a call just as the stock was apexing, and now we can try to further enhance the risk:reward on the option position. We’re long a Feb 24 put for 0.35 and short a February 29 call for 0.60, and I’ll recommend offering a February 21 put (UMUNT) short for 0.35, good through Friday. (Note: If you hold the position in bigger size, you should short as many options as you are long Feb 24 puts.)
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on Feb. 29th - Mar. 1st. 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.
Roadie to Telluride Rejuvenates Your Editor
by Rick Ackerman on January 26, 2010 5:30 am GMT · 5 comments
Nothing like a good road trip to clear stock-market and newspaper rubble from the mind. I spent the weekend in Telluride with a college buddy, Peter Ricciardelli, who has lived there for nearly 30 years. I couldn’t keep up with him on the slopes, since he’s in even better shape now than when we were at the University of Virginia in the late 1960s. Hiking, biking and plenty of skiing have kept him as fit as a collegiate wrestler. That and plenty of cross-country skiing. He and his significant other, Lisa, a native Coloradan who lives in Montrose, made fresh tracks on Nordic skis Sunday while I took another crack at Telluride » Read the full article