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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
We’ve enjoyed one heckuva ride from Monday’s exact low, and the single contract we still hold is showing a theoretical gain of more than $2,800 at these levels. The futures took off yesterday after narrowly missing the 1157.25 stop-loss I’d advised, and they never looked back. Now, the 1175.75 rally target we’ve been using not only remains viable, it will be an enticing place to reverse our long position and go short. However, you should use a “dynamic trailing stop” between here to the target, shrinking the original four-point trailing stop so that you are never risking more than a third of what you stand to gain if the futures reach our target. Based on a so-far high for this rally of 1170.50, that means your trailing stop should be no wider than about 2.00 points. If shorting at 1175.75, which I am explicitly recommending, use some of your profits to cushion a relatively loose initial stop-loss at 1177.25. ______ UPDATE: Using the shrinking trailing stop advised, we exited at 1168.00 for a theoretical gain of $2750. I am surprised the futures were unable to muster the modest finishing stroke to the 1175.75 target. As always, however, they seem even more unable to weaken significantly.
Gold has been screwing the pooch since Christmas, really, and there is therefore no point in getting worked up about intraday swings of $20 or less — especially when they fail to create fresh bullish or bearish impulse legs on the hourly chart. Today, that would require, respectively, a print at either 1127.00 or 1088.40. Bulls looking for something subtler, albeit riskier, can infer a breakout at 1108.90, since that’s where the 3-minute chart would turn positive. _______ UPDATE: The April contract has dipped below 1088.40, creating a bearish inmpulse leg on the daily chart. Although I am not inferring any significant weakness at this point, neither does it portend an imminent rally to new all-time highs. What gold is telling us is that, even though there is good supportive buying underneath, a period of consolidation lies ahead. I wouldn’t be surprised to see Gold trading a month from now about where it is today. Most immediately, the futures appeared bound for a minimum 1073.20.
On the 3-minute chart, the corrective pattern from Tuesday’s high, 17.150, looks like it could find tradable support at exactly 16.860. The abc coordinates are delicate enough that I’ll recommend using a stop-loss no wider than four ticks off a 16.865 bid. If the order fills you’ll be on your own, but you should try to take at least a small profit early on if it comes available. _____ UPDATE: Silver took a three-cent bounce from within a tick of the Hidden Pivot support noted above, so traders who bought on the way down could have booked a nice profit on a day when sellers prevailed. The new downside target is 16.365, a Hidden Pivot support we can use as a minimum projection for now.
The corrective pullback missed my minimum target by a few hundredths of a point, but we shouldn’t let that deter us from acknowledging the power and potential of the thrust that appears to be under way. Just one small change is warranted: My initial rally target was 82.09, but I have raised it to 82.17. Shorts can use that number aggressively, but you’ll need to interpolate it to fit your vehicle of choice.
Let’s add the Dow Industrials to the list of major stock indices that we would like to short. This can be done using a midpoint pivot of 111.50 from the weekly Diamonds chart. We recommend selling at 111.37 with a stop at 111.77, risking $40 per 100 shares traded. The equivalent of the pivot in the June Dow futures contract is estimated to be 11087. (Posted by Doug McLagan) ________ UPDATE (2:40 a.m. EST, March 31): In reconsidering the risk/reward characteristics of this trade, we have decided to cancel the recommendation. Should the target be reached, however, traders should be alert to hidden pivot-based opportunities to get short if a reversal there appears to be underway. For the Dow Jones Industrial Average, the midpoint is at 11156.44.
| 11156.440 |
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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.
We Applaud Google for Defying Beijing
by Rick Ackerman on March 24, 2010 12:01 am GMT · 23 comments
All due praise to Google, which has put principle above money by refusing to censor search results in China. We can’t recall the last time an American company publically took the high road, ethically and morally speaking – especially when billions of dollars of potential revenues were at stake as they are in this case. More often, we read about bribery scandals abroad and cynically assume it’s the cost of doing business in the ethical swamps that lie outside of Europe, Canada and Japan. China is much worse than merely corrupt, however, » Read the full article