September 2010

Drum-rolled numbers in SI, AU

– Posted in: Rick's Picks

Gold and silver are within easy distance of some Hidden Pivot targets that I've drum-rolled in each.  The resistance points should be tradable, which for position players would imply covered writes or shorts against the box (check with your broker about the tax implications, though); and for traders and scalpers, outright shorts with tight stops.

GCZ10 – December Gold (Last:1309.50)

– Posted in: Current Touts Rick's Picks

We remain focused on an important rally target at 1340.00 but cautious nonetheless about picking camouflage entry spots, since gold's consolidations of late have amassed a graveyard of spent point 'C's. As such, I'd suggest letting the first entry-trigger  'X' go by even when trying to get long on patterns of very minor degree. Alternatively, the subtlest hint of trouble today would come on a print at 1305.50. You'll need to be on the 10-minute chart to figure out why.

SIZ10 – December Silver (Last:21.920)

– Posted in: Current Touts Rick's Picks

When we speak of powerful impulse legs, we have rallies like yesterday's in mind, since it extended a six-week winning streak to include the conquest of yet another "external" peak -- the watershed high at 22.055 recorded in March of 2008. This all but guarantees higher highs ahead, and it will serve to fortify us even if the futures should pull back by as much as $6.  That said, a longstanding target at 22.505 merits extreme caution, since a tradable pullback from that number appears most likely.  I will also flag a new, potential trouble spot at 22.718, a Hidden Pivot target that comes from the weekly chart (see inset). Because the chart is a composite "blend" of various expiration months, the target should not be regarded as precise.  However, it will add to the weight of the 22.505 target that we have precisely, giving us yet another reason to take precautions when Silver ascends into an implied (approximately) 22-cent topping range between the two numbers. Long-term bulls should want to see the futures punch through 22.505 within hours of first encountering it.

ESZ10 – E-Mini S&P (Last:1140.75)

– Posted in: Current Touts Free Rick's Picks

Yesterday was most impressive -- if tedium is the yardstick.  Even though we found the best opportunity of the day during an online trading session, initiating a long position a tick off the intraday low, it went nowhere after an initial run-up of 8 points.  The implied, theoretical gain of $400 is not bad, considering we risked only a theoretical $50 at the outset.  However, we were denied an additional $800 of profit per contract when the futures failed to even head-fake a run at their actual target of 1159.75, 16 points higher. This was pretty sobering. We are constantly reminding you that there is virtually no bullish buying in this market -- only short-squeeze rallies that lift the futures from one resistance level to the next. All of the evidence suggests this is true, but we are still  amazed at how the dynamic sometimes seems capable of propelling stocks upward indefinitely. There is no real selling either, presumably because individual investors are out of the market, and that has been a factor in the rise of shares. But the by-now predictable pattern of tedious, turgid consolidation until the next short-squeeze has been primed has made market-watching almost unbearable. There is unlikely to be any excitement today either, but if you're looking for (relatively) easy opportunity, try bidding a tick above a Hidden Pivot support at 1133.25, stop 1132.75. You'll be on your on if the order fills (which could conceivably happen overnight), but that would pre-empt the 1159.75 target, replacing it with another at 1164.00 -- a Hidden Pivot midpoint -- and its 'D' sibling at 1164.00. _______ UPDATE: The overnight low was 1134.25, so we missed getting on board the gratuitous, 19-point trash rally that followed by three ticks.  The futures eventually detumesced back down to the pivot, but we just watched, unenticed by sloppy seconds.

WSJ Finally Notices Gold’s Bull Market

– Posted in: Commentary for the Week of March 8 Free

Should we be worried now that the Wall Street Journal has “discovered” the bull market in gold?  Relax. This bull market has years to go. It’s so powerful, in fact, that it will easily be able to shrug off yesterday’s front-page headline in the Journal, “Gold Vaults to New High,” and continue into the ozone. With the price of gold up 353% since 2000, the Journal was bound to notice the bull market sooner or later.  A related headline on page two further qualified gold’s leap to new record highs as being related to “global worries.”  This is true as far as it goes, but it overlooks the fact that gold has risen even in years when we weren’t so worried. And that is what we like most about the bull market in bullion: Whatever investment “story” has been out there over the last decade, gold as an asset class has led the pack.  It has flourished during periods when investors were worried about inflation, but also when they were worried about deflation.  The rally has weathered good economic times and bad, high and low unemployment, and a secular decline in interest rates. Gold has performed well when corporate bonds were in favor, and when they were not. Its price has risen when muni bonds and Treasurys were all the rage, and when both have been out of favor. If hell or high water lie ahead, we expect that neither will diminish gold’s allure. There’s Midas to Consider All of which makes it difficult to put the knock on the stuff. Not that we can blame the Journal and their ilk for trying. For how could they not when Gold’s price has quintupled off the lows? However, the arguments that skeptics are trotting out are so feeble that gold bulls should

Sept 29, 2010: A Perfect Trade in the E-Mini

– Posted in: Free Tutorials

We caught a beautiful bottom in the E-Mini S&Ps, using a somewhat tricky pattern to get long a single tick beneath what turned out to be the low of the day. This was done bottom fishing-style – i.e., without camouflage -- because the set-up looked so enticing. The actual trade had been advised earlier that morning during a “trading room” session attended by more than 100 people. It was an hour later, during the weekly tutorial session, that we reviewed the trade and my rationale for using a 1.00-point stop-loss. (I’d dithered over using a two-tick stop (!) but eventually decided to go for, um, broke.) We also looked at Gold and Silver as usual, finding an additional reason to take seriously a 22.505 target for the December contract that I’d been drum-rolling for weeks.

HUI – Gold Bugs Index (Last:513.62)

– Posted in: Current Touts Free Rick's Picks

On the daily chart, a major Hidden Pivot at 558.55 can serve as a minimum upside objective for the near term.  However, if it's exceeded on a closing basis, or intraday by more than a couple of points, we should infer that the 576.19 target of an even larger pattern is in play. Both patterns are shown in the accompanying chart, and in each instance the rally had little trouble getting past the respective Hidden Pivot midpoint. This bodes well for a presumably imminent attempt to surpass the  watershed peak at 516 recorded in December 2009, although I don't expect this feat, which could be achieved as early as today, to evince much strain.)

ESZ10 – E-Mini S&P (Last:1142.25)

– Posted in: Current Touts Rick's Picks

The May 12 peak at 1160.75 that I've highlighted in the chart remains crucial to determining the ostensible health of the bear rally begun in July. The futures already missed an opportunity to impress us with an uncorrrected thrust through that resistance when they pulled back 27 points last week. That allowed them a running start at 1160.75 that has needed to be corrected as well.  While we should love to see this limping lump of brick dust fail to clear the peak altogether, and for the Kudlows and institutional miscreants of the financial world to be trapped like the Egyptians at the Red Sea, that is probably too much to hope for.  Shorts remain to be squeezed, and even to be stampeded, if the news should turn less than horrific for a week or two, and so we should expect DaBoyz to eventually effect a distribution above 1160.75. Regardless, we'll take things one day at a time, which means we are focused on an 1159.75 Hidden Pivot rally target right now, subject to midpoint cross winds at 1143.50.  Said midpoint has already been exceeded by 2.50 points, so don't hold your breath waiting for a trend failure here.

SIZ10 – December Silver (Last:21.707)

– Posted in: Current Touts Rick's Picks

We remain focused on a 22.505 target that comes from the weekly chart (see inset), but keep in mind that buyers will need to push the futures past a daunting peak at 22.055 recorded in March of 2008 that would have trapped bold legions of Silver bulls.  They will be laughing in the bad guys' faces if they can close Silver above that peak today or tomorrow, but just getting as close to the peak as the futures have done already suggests buyers are not intimidated. You should also take time to notice on the weekly chart that the rally from late August's low at 17.785 is as yet unpaused, and that a further extension above 12.055 without a pause will create a very powerful impulse leg -- powerful enough, in fact, to fortify the futures against a corrective move down to as low as 16.640.  For today, traders can short 20.505 via a two-contract offer a tick below that price, and a stop-loss at 20.525.