January 2011

SLW – Silver Wheaton (Last:33.88)

– Posted in: Current Touts Free Rick's Picks

We are long 800 shares @ 14.91 against eight February 33 calls shorted for 1.94.  Do nothing for now, since the calls won't even begin to hurt us unless the stock rallies above 35.  We can only hope to experience that kind of pain! ______ UPDATE (10:07 p.m. EST):  Using a one-cancels-other order, buy eight February 36 calls if the futures trade either 33.48 or higher;  or 34.48 or lower. The lower number is a 'D' correction target and probably as cheap as the stock might get today.  However, a print at the higher number would indicate a bullish breakout, and we don't want the stock to run away from us.

USH11 – March T-Bonds (Last:121^05)

– Posted in: Current Touts Free Rick's Picks

The distributive pattern shown in the chart points ostensibly to 112^28, and that's the number we should use to target any hellacious decline in the bonds.  However, it shouldn't go unmentioned that such a lengthy and tightly constrained sideways move in this vehicle is most unusual -- a result, one supposes, of Fed T-bond purchases that for the time being are restraining the long end of the yield curve. The effort can only end badly, but so far there has been rather less strain than we might have expected.

ESH11 – March E-Mini S&P (Last:1274.50)

– Posted in: Current Touts Free Rick's Picks

If the secular bear market is indeed re-emerging with a vengeance, then the S&P's failure to reach a modest 1305.75 rally target after an all-but-interminable series of mincing steps becomes understandable. That failure is in fact official, since the 1267.50 point 'C' associated with the target was exceeded to the downside on Friday.  Further slippage today to beneath early July's 1257.75 low would significantly increase the implied strength of the bearish impulse leg, which was catalyzed by a vicious head-fake on Friday's opening bar.  Note that a bigger-picture target at 1356.00 remains viable, since the 'C' of the massive pattern that produced it lies far, far below, at 1165.75.  Even so, one gets the idea from the chart that Friday's plunge represents a tone-change for a bull cycle that since early December has proceeded with arrogant certitude the entire way.

SIH11 – March Silver (Last:27.885)

– Posted in: Current Touts Free Rick's Picks

Silver is doing better than Gold Sunday night keeping Friday's promising energy alive, but even it has begun to backslide shortly after midnight.  A print at 28.575 would exceed a minor (i.e., "look-to-the-left") peak on the hourly chart, refreshing the bullish impulse, so let's use that price for now as a trigger threshold to signal a possible "camouflage" buying opportunity.

GCJ11 – April Gold (Last:1333.20)

– Posted in: Current Touts Free Rick's Picks

Gold's droopy performance Sunday night is hardly encouraging, but it may be attributable to the fact that all hell is not breaking loose in the Middle East, at least not yet. In fact, the news stories of the hour center on whether Mubarak will be able to hold power in Egypt.  Although it is certainly reasonable to pose this question above all others, I wouldn't lay odds on a sanguine outcome, nor would I bet that other, very scary, issues will not surface as the week progresses. In any event, from a technical standpoint April Gold will need to pop to at least 1354.10 today to keep Friday's momentum going.  I've included a chart that shows why this price is relevant.  Alternatively, until such time as 1349.00 is exceeded to the upside, a correction target of 1291.90 given here earlier will remain valid.

Gold’s vital signs…

– Posted in: Rick's Picks

Today's commentary is cautious in noting that Friday's strong rally in gold was not quite the moon shot that will be needed to launch it skyward. Still, it is something new and notable when bullion quotes seem, finally, to be responding not only to the global monetary blowout, but to geopolitical developments that threaten to further destabilize the most dangerous region of the world.

Dormant for Years, Fear Re-Emerges on Wall Street

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

Has the Mother of All Bear Rallies breathed its last?  We think so, although if this proves to be the case the climax will have occurred in an odd place, technically speaking. Although we long ago ran out of fundamental reasons to look for higher stock prices, our focus solely on technical indicators suggested that the insanity still had at least a little further to go. Specifically, we were looking for the S&P futures to rise at least 56 more points before topping out in a big way.  That would equate to a rally of approximately 400 points in the Dow.  Gold and silver quotes also sharply reversed direction on Friday, rising from a similarly unexpected place.  Although we’d called for a potentially important low at 1296.50 for the February Comex Gold contract, the futures appear to have made a bottom well above that number, at a 1307.70 price that wasn’t even on our radar.  Very clearly, it was news of the fiery upheaval in the Middle East that drove the markets wild. However, that shouldn’t have had any bearing on whether our price targets were reached. In fact, we’ve come to regard news simply as the catalyst that drives stocks to our “hidden pivot” targets.  Under the rules of the proprietary Hidden Pivot System, if a trend reverses decisively without having reached a clear target, it is assumed the new trend will have legs -- especially when this dynamic plays out on charts of degree above the hourly.  Our conditions were not met on Friday, not quite, but it is probably just a matter of time before this occurs. What to Look For So what would it take to suggest that the steep moves that we saw on Friday -- one potentially reversing a nasty correction in precious-metal prices, the other potentially terminating a

GOOG – Google (Last:604.76)

– Posted in: Current Touts Free Rick's Picks

If Google were to fall to 602.23, a midpoint Hidden Pivot, I'd be tempted to bid there aggressively with a stop-loss as tight as 601.99.  A decline of such magnitude is not likely to happen today, especially since it would be bucking a forecast that calls for at least slightly higher highs for index futures.  However, the target itself is compelling, and it will remain valid as long as 622.49 is not exceeded to the upside. ______ UPDATE (12:39 p.m. EST):  GOOG ignored the pivot, falling instead to within 3 cents of the visually obvious support of Monday's dramatic 601.23 low.  Our theoretical loss on the trade was $24 per round lot, plus commissions.  The too-obvious support aside, my hunch is that the breach of the pivot has ordained a further fall to its 'd' sibling, 581.97.

Timing is everything…

– Posted in: Rick's Picks

We've been waiting patiently for an eon to short the E-Mini S&P, but I would caution against initiating the trade if the futures somehow contrive to reach the target with an hour or less remaining in the session.  It was never my intention to take the position home over the weekend.