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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
Late Monday evening the E-Mini S&Ps were continuing their annoying little jig just inches from our 1171.25 stop-loss. Set-it-and-forget-it is how we handle this kind of tedium — and let’s not be disappointed if we get stopped out for a $2,400 gain. If the futures should close a point or more above the stop, we should infer they’re bound for a minimum 1186.25.
Putting Hidden Pivots aside for a moment, we’ll use a garden-variety trendline as a minimum upside target for today. It comes in around 1123 and looks solid enough to challenge buyers if they should try to make a run for it. A close above 1123 would be quite bullish, although I’m hard-pressed to offer a precise rally target due to the wishy-washy nature of discernible rally patterns up to the level of the hourly chart.
Our modest short position has ceased to be worth caring about. Rather than allowing the puts to waste away as we become increasingly forgetful about checking on them each day, I’ll suggest closing out the position — long two April 48 puts – shortly after the opening bell if the options have traded for 0.60 or less. I have couched the recommendation in those terms because I do not want you dumping the puts if the QQQQs begin the day looking like hell (unlikely as that may sound). ______ UPDATE: We exited the puts for 0.50 (or so), sustaining a whopping loss of about $15 in the process. The lesson here is that even if your entry is perfectly timed, and even if you do some judicious, perfectly timed partial-profit taking along the way, it is still not possible to make money with put options (unless, of course, you are a naked seller of them). This has been true perhaps 99.97% of the time since listed options were first offered by the CBOE in 1973 and it remains true now, even if the shorting has faded a rally that we all know is doomed.
The futures got as high as 17.440 yesterday, but they’ll need to close above a midpoint resistance at 17.565 (see chart) to develop enough thrust to leave this month’s highs behind. Thereafter, they’d become an odds-on bet to hit 18.575 within a day or two — not quite enough to refresh the bullish trend on the daily chart. That would take a print exceeding 18.900.
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Hidden Pivot Webinar & Tutorials
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We Will All Pay for the Dummies
by Rick Ackerman on March 30, 2010 2:23 am GMT · 24 comments
(Editor’s note: We wrote here yesterday that mortgage forgiveness would crater the housing market to much greater depths, with homes ultimately falling 70% from their peak values. The following response, from “Donniemac,” was one of the more interesting posts in the Rick’s Picks forum. He sees signs of a recovery, but also the death of the America Dream for many chastened borrowers.)
Loan balances are either paid by the bank or the lendee. Therefore, the someone who is going to “pay” for the housing bust is the banking industry. And, eventually, the taxpayer probably will be called upon to prop up the banks — maybe through very liberal tax write offs of bad debt or through another round of bailouts, who knows? What the collective “we” need to have happen is to have the current economic growth be real. I know that doom-and-gloom attitudes seem to be the norm, but from my view, a return to a functioning economy is slowly becoming a fact. But there will be a large number of citizens who will have their lifestyles drastically altered — in particular, early boomers who are, say, 55 or » Read the full article