September 17th, 2014
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So, was it thinking machines that put stocks into a death dive last week, or was it primal human fear?  Either way, there’s a neurological disease at work and therefore little likelihood of a cure.  Even worse, since these diseases tend to be degenerative, we should expect something still more disruptive in the future. Ham-handed regulations won’t be able to stop it, either.  Let the exchanges install all the circuit breakers they want; supply will out someday, catastrophically overwhelming demand when buyers go AWOL. This is inevitable when you create a global electronic trading network connecting ten billion » Read the full article


TODAY'S ACTION for Monday

Bullish Benchmark for the E-Mini Dow

by Rick Ackerman on May 10, 2010 3:59 am GMT

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Rick's Picks for Monday
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Early Sunday evening, index futures were caught in a vicious short-squeeze that bids fair to recapture all of last Thursday’s losses.  It would seem to be drawing its energy from the latest — and rather large, even by American standards — European bailout package.  The loan guarantees just announced amount to some $560 billion, offered to the EU’s most troubled economies. This PR hoax could have legs, but from a trading standpoint it will lay an egg if it fails to push the E-Mini S&Ps above  1136.00.  That is Thursday’s recovery high, and it lies somewhat above the 1130.75 peak achieved so far this evening.  The futures are currently trading for 1122.50, equivalent to a 140-point rally in the Dow above Friday’s settlement price. _______ UPDATE (2:32 a.m. EDT):  DaScumballs are doing what they’ve been doing so very deftly since March 2009:  lifting index futures as high as they can get away with on razor-thin Sunday night volume.  From a Hidden Pivot standpoint, DaBoyz can get away with as much, perhaps, as 1170.75.

Comex June Gold ChartFriday’s robust thrust fell ten dollars shy of a 1224.70 target, subjecting Gold to a little more bullying than usual Sunday evening.  We can ignore it as long as the futures hold above 1189.20, but anything below that number will create a mildly bearish impulse leg on the hourly chart. If there’s opportunity brewing for night owls, it would likely come from the 15-minute chart (shown).  The modest downtrend has a midpoint pivot at 1195.80 that you can bottom-fish with a three-tick stop-loss, and another Hidden Pivot at 1188.90 that deserves the same treatment.  Both lie just below “structural” supports whose breach will be read by most traders as breakdowns. _______ UPDATE (2:21 a.m. EDT):  A rally Sunday night invalidated the two downside targets but created two new ones. The first is a midpoint support at 1198.60 that has already been breached; the second, a ‘D’ target at 1190.70 that you can bottom-fish with a stop-loss as tight as four ticks. If it’s hit, look for more selling down to 1187.70, my worst-case low for today and another spot to try bottom-fishing with as tight a stop-loss as you can abide. _______ FURTHER UPDATE (8:57 a.m. EDT): The futures have exceeded  1187.70, bottoming so far at 1184.40 and hinting of still more weakness to come. They’d need to pop above 1206.50 today to undo the damage.

SIN10 – July Silver (Last:18.335)

by Rick Ackerman on May 10, 2010 3:47 am GMT

A print exceeding 18.910 today or tomorrow would kick the buying into high gear, creating a bullish impulse leg of daily-chart degree that would turn December’s watershed high at 19.420 into a sitting duck. Anything less, however, could strand Friday’s spike, leaving buyers to cool their heels in the wake of Friday’s spirited charge. More immediately, there are two spots where night owls might try bottom-fishing with a stop-loss as tight as three ticks:  18.235; or somewhat more conservatively, at 18.165.  (Please note that numbers in boldface brown are usually ‘D’ targets of downtrends, while brown number in a lighter type-face are midpoint pivots.  Uptrending targets and midpoints are similarly given in green, although I will sometimes use brown and green to highlight price points that are important though not Hidden Pivots.) _______ UPDATE (8 a.m. EDT):  June Silver bottomed at 18.215, two cents below the higher target but well above the lower.  I’ll record nothing done officially, but please note in any case that upside to as high as 19.415 over the near term has been signaled. Key resistance lies at 18.815, the Hidden Pivot midpoint associated with the target. 

YMM10 – E-Mini Dow (Last:10694)

by Rick Ackerman on May 10, 2010 3:55 am GMT

As of around 10 p.m. EDT Sunday, the futures looked bound for 10670, a shortable Hidden Pivot (albeit a relatively risky one; a more conservative short can be initiated at 10712). That would represent a 335-point gain over Friday’s close, and although it would not recoup last Thursday’s loss completely, it would handily exceed the day’s recovery high, creating an impressive bullish impulse leg in the process. _______ UPDATE (9:09 EDT):  The rally now measures to as high as 10937, well above last Thursday’s pre-swoon high of 10865.  A pullback in the meantime to (precisely) 10569, the target’s sibling midpoint, would telegraph the next thrust.

GS – Goldman Sachs (Last:143.13)

by Rick Ackerman on May 10, 2010 5:19 am GMT

If Goldman drifts lower over the next 5-7 days, we’ll look to bottom-fish down at 136.11, the lowest Hidden Pivot target that can be derived from the intraday charts. If I can come up with a way to initiate the trade using a limit bid for some near-the-money call options, I’ll feature the trade as a Pick of the Day for all. _______ UPDATE (May 16):  Scratch Goldman from the list of stocks we’ve been watching lately, since it has become too, too boring to deserve our time and attention. My minimum downside objective is now 135.35, and I’ll set an alert there, since the support will be worth bottom-fishing if it’s ever reached — which it will be.

$YHOO – Yahoo! (Last:42.71)

by Rick Ackerman on September 17, 2014 5:28 am GMT

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$SIZ14 – December Silver (Last:18.655)

by Rick Ackerman on September 16, 2014 1:25 am GMT

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$SLW – Silver Wheaton (Last:23.06)

by Rick Ackerman on September 15, 2014 6:06 am GMT

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GCZ14 – December Gold (Last:1237.60)

by Rick Ackerman on September 15, 2014 5:50 am GMT

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$DJIA – Dow Industrial Average (Last:17025)

by Rick Ackerman on September 12, 2014 12:01 am GMT

When a stock or an index takes a wicked dive, it often occurs after the particular vehicle has marginally exceeded some prior, significant peak. ‘Everyone’ turns bullish on the breakout, including bears prepared to cover on a hair-trigger signal, and that sets up the haymaker. Notice in the accompanying chart, however, that the record high recorded by the Dow on September 4 has led to no such plunge.  The high exceeded July’s record peak by 10 points, and that should have been enough to get bulls’ — and bears’ — juices flowing.  Instead, we’ve seen only a moderate pullback since then, leaving bears very much on the hook.  We could still see a collapse from these levels, particularly if there is unsettling news. But for the time being, bears shouldn’t get their hopes too high. We are short the Diamonds via some out-of-the-money put options just in case, but we may have to reshort if DIA breaks out to new highs. (Note: This tout is being written before Thursday’s close, since I will be away from the office later today.)

$TLT – Lehman Bond ETF (Last:113.11)

by Rick Ackerman on September 11, 2014 1:29 am GMT

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$+DIA – Dow Industrials ETF (Last:171.27)

by Rick Ackerman on September 5, 2014 3:58 am GMT

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$SNIPF – Snipp Interactive (Last:0.2562)

by Rick Ackerman on September 5, 2014 3:05 am GMT

I first touted Snipp Interactive back in January, when it was trading around 0.15. Although the stock subsequently fell to a dime, it has since rallied sharply, settling at 0.2562 yesterday. This is one of my favorite stocks, and I came away from a conference call with its CEO, Atul Sabharwal, eager to sing their praises. During that call, I hit Atul with my best idea, a sweepstakes-type promotion, but he was already three steps ahead of me, able to cite, for one, New York State’s rules and costs for exactly the type of marketing scheme I’d suggested.

Full disclosure: I hold 100,000 shares plus warrants to purchase another 50,000 shares.  But I hope that won’t discourage you from performing your own due diligence, since you are likely to be as impressed as I was when you find out what the company has been up to. For me, at least, Snipp (OTC: SNIPF) perfectly satisfies Peter Lynch’s rule that investors favor companies whose strengths and methods they can understand. Snipp does interactive marketing that allows clients to track results in real time. The results have been sufficiently impressive that the company has been attracting blue chip clients with little difficulty. Read more about SNIPP by clicking here.

From a technical standpoint, although the stock’s chart history is thin, it’s possible to project a near-term rally target of 0.2730. A tenet of Hidden Pivot analysis is that an easy move through such targeted resistance implies there is unspent buying power percolating beneath the surface. This is not a “hot tip;” indeed, Snipp’s story does not lend itself to the kind of hubris that will result in a $10 billion IPO. But it is an aggressive and imaginative pioneer in a rapidly developing niche, and its CEO has the kind of imagination, intelligence and energy that inspires confidence.

$+TSLA – Tesla Motors (Last:279.20)

by Rick Ackerman on September 3, 2014 5:30 am GMT

Tesla’s strong rally has turned the Oct 3/Sep 5 calendar spread into a solid winner. The spread is currently trading on a bid/asked of 4.50/5.07.  This means subscribers who bought the spread for as little as $1.00 last week could have quintupled their stake. The most paid for it would have been about 1.54. In any case, I’ll suggest offering half of the eight spreads to close today for 4.70. We’ll plan on rolling what’s left on Friday by covering (buying) back the September 5 300 calls we’re short and shorting the Sep 12 300 calls at the same time. ______ UPDATE (10:40 p.m. EDT): The stock’s push to an intraday high at 291.42 made the spread an easy sale for $5.00+, so I’ll consider the order filled.  Now, roll the four spreads that remain into the October 3 /September 12 calendar as detailed above. _______ UPDATE (Sep 7, 10:31 p.m.): The midway price on the spread intraday was 2.30. Imputing the premium to the four October 3/September 12 calendar spreads we now hold would zero out the initial cost of 1.54 and add 0.76 to the real-time value of the spread.  We’ll plan on rolling the spread again on Friday by selling the September 19/September 12 call spread (and thereby covering the short Sep 12 300s), but for now do nothing further. _______ UPDATE (Sep 15, 12:54 a.m.): I’ll use a 0.37 price, midway between the intraday high and low, as the spread price unless I hear from someone in the chat room who did better or worse. Imputing this new premium income to our Nov 22 / Sep 20 spread gives us a CREDIT cost basis of 1.13, for a guaranteed minimum profit on the position of $452. That would be in addition to whatever the Nov 22 calls fetch when we exit them.

+GDXJ – Junior Gold Miner ETF (Last:37.51)

by Rick Ackerman on September 2, 2014 12:03 am GMT

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This Just In... for Monday

The View from the Trading Floor

by Rick Ackerman on May 10, 2010 7:28 am GMT

Viewed from the trading pits, last week’s death dive looked like the end of the world to some denizens. Click here for the perspective of floor traders who had a ringside seat.


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