November 23rd, 2014
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Weekly Commentary

[Dr. Kurt Richebächer was one of the most visible and vocal proponents of Austrian School economics at the time of his death in 2007.  Eight years earlier, at the height of the dot-com bubble, we interviewed him for the Sunday San Francisco Examiner.  In retrospect, the economic problems that he believed threatened the global economy were small and relatively manageable back then. The same problems are of course still with us, and Richebächer undoubtedly would be appalled by the extent to which they have metastasized.

Although he spoke of a deflationary collapse in the interview, a close reading of his monthly newsletter from 1997-2002 reveals that he was conflicted on the subject. He used the word “deflation” only rarely during that period, and when he did, his logic became uncharacteristically muddy. Perhaps this is because, in the Austrian scheme of things, spectacular credit blowouts are not supposed to beget deflation, but rather, inflation. Arguably, if he were around today, he would still be uncertain as to which is likely to prevail when the economy finally collapses, as it must.  The interview below appeared in November 1999 under the flippant headline -- not my work, for sure -- “Economic Basics Predict Apocalypse”.  RA]

The dismal science will never be the same if Dr. Kurt Richebächer’s dire predictions for the global economy should come to pass. The former chief economist and managing partner at Germany’s Dresdner Bank says a deflationary collapse lies ahead that will ravage the world’s bourses and usher in a dark period of austerity and financial discipline.

Probably not one economist in 50 shares his views, at least not publicly. Richebächer, now living in France, says many of his American colleagues have been seduced into ignorance and complicity by Wall Street’s billions as well as by their love affair with mathematical models that shun fundamental laws of economics. Where they see a New Era of productivity growth and industrial efficiency, he sees duplicitous bookkeeping and manufacturing’s steep decline. They talk of a booming U.S. economy; he sees a profitless mirage. They worship capitalism’s bold risk-takers; he scorns them for recklessly piling leverage to the sky. Someone’s going to be wrong, but judge for yourself who. » Read the full article


TODAY'S ACTION for Wednesday

Sweetening the tedium

by Rick Ackerman on June 8, 2011 8:09 am GMT

More tedium was the prediction for bullion here a couple of days ago, and it seems to be coming true. Thrill-seekers might want to take a look at today’s tout for July Sugar, which, as a chat room denizen noted, appears to be taking off for a seasonal flight-of-fancy.


Rick's Picks for Wednesday
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June E-mini S&P (ESM11) price chart with targetsIt’s understandable if you’ve lost interest in the downside targets I gave here earlier at, respectively, 1273.50 and 1276.50, since I’ve practically lost interest myself. Getting there has been pure tedium, a downtrend punctuated each day by either a Whoopee Cushion rally or numerous feints higher.  Alas, there’s also an excess of enticing Hidden Pivot targets to bottom-fish at the moment.  One that I especially like that is perhaps best suited for Tuesday night owls lies at 1274.75, and it can be bid with a 1.00-point stop-loss.  At the time this recommendation was published, the futures had exceeded by a single tick the 1281.25 midpoint associated with that number.  Accordingly, you should be alert for a possible bounce that could be traded bullishly via camouflage on the three-minute chart.  If there is no rally, or not much of one, that would affirm the outlook for more slippage to as low as 1269.75.

Incidentally, if you don’t subscribe to Rick’s Picks but would like to know more about the proprietary camouflage trading technique that we use to keep entry risk to a bare minimum, click here for information about the Hidden Pivot Webinar in late June.  You could also take a free week’s trial subscription that will give you access not only to detailed trading recommendations each day, but to a 24/7 chat room that draws experienced traders from all over the world. ______ UPDATE (10:02 a.m. EDT):  The 1276.50 pivot we’d grown so bored with caught the overnight low within a single tick, so officially we did nothing.  As a practical matter, a camouflage long entry from the 6:48 a.m. (EDT) bottom would have been difficult to justify, even on the 3-minute chart.

SLW – Silver Wheaton (Last:33.70)

by Rick Ackerman on June 8, 2011 4:59 am GMT

Silver Wheaton (SLW) price chart with targetsThe stock is sitting at a precipice, since yesterday’s close was on a major trendline (see inset). The support is so obvious that we should be alert to a possible false breakdown that could afford us a bottom-fishing opportunity.  The nearest Hidden Pivot support lies at 31.91 (A=37.72 on May 10, daily chart), so that’s where it should be attempted.  Camouflaged entry is preferred, but if you don’t want to bother, or if you don’t know how, bid 31.93, stop 31.86, for 400 shares. Please note that if Wheaton should really fall apart it could fall all the way to 26.77, the ‘D’ target of a pattern shown in the chart.  We continue to hold 300 shares @ 42.01 against three June 40 puts with a 4.00 basis, but option expiration will soon put it out of its misery.

GCQ11 – August Gold (Last:1539.90)

by Rick Ackerman on June 8, 2011 5:15 am GMT

August Gold (GCQ11) price chart with targetsA dip below 1536.30 would cede control to bears for the near term, sending the futures down to a likely test of support at 1531.10, a Hidden Pivot whose provenance is shown in the chart.  The one-off ‘A’ is so seductive here that I have ignored the fact that the point ‘B’ of the pattern is pure ’sausage’ (having failed to breach the 1536.30 low).  Accordingly, I’ll recommend bottom-fishing  at 1531.10 with a 1531.30 bid, stop 1530.70. ______ UPDATE (9:54 a.m. EDT): The futures fell $12 overnight to a low that was 0.70 points shy of our target, so officially we did nothing.  The subsequent $13 upthrust has taken the trade out-of-range, so cancel it.

SIN11 – July Silver (Last:36.720)

by Rick Ackerman on June 8, 2011 7:06 am GMT

July Silver (SIN11) price chart with targetsThe high of yesterday’s gratuitous thrust didn’t even come close to the 37.890 peak whose breach would have signaled a bullish resurgence, but it remains valid nonetheless as a trigger point to watch if you’re keen on buying a breakout. Meanwhile, in trading early Wednesday morning (EDT), a Hidden Pivot support at 36.770 resisted sellers for all of a half-hour, hinting of further slippage over the near-term to at least 36.290, its ‘d’ sibling. You can bottom-fish there with a stop-loss as tight as four ticks, but the appeal of this gambit will diminish as the night wears on and the c-d leg becomes increasingly labored. ______ UPDATE (10:18 a.m. EDT):  The futures took a 30-cent bounce overnight from 36.250, so if you used the four-tick stop-loss advised, you would have missed the tradable low by a tick, with a resulting, modest loss of $100.  The futures have subsequently surged anew, but the recovery high at 36.820 is nowheresville relative to the tedious range of the last five days.

SBN11 – July Sugar (Last:24.37)

by Rick Ackerman on June 8, 2011 7:48 am GMT

July Sugar (SBN11) price chart with targetsA chat room denizen suggested taking a look at sugar — “a nice set-up, and the seasonal low is in” — and so we shall.  Price action since early May’s low does indeed look bullish, since successive upthrusts on the daily chart seem to have had little trouble impulsingv above previous peaks. Dropping down to the hourly chart, the most recent such surge projects to 24.55, a Hidden Pivot that lies just six cents above yesterday’s high.  An easy push past the number would hint of yet more bullish action to come, and as you can see, the hourly chart is loaded with “external” peaks  that can be easily leveraged by the adroit Pivoteer.

JYM11 – June Yen (Last:1.2487)

by Rick Ackerman on June 8, 2011 8:01 am GMT

June Yen (JYM11) price chart with targetsAll the king’s horses seem unable to suppress the yen, much to the detriment of Japan’s increasingly desperate exporters. The nearest Hidden Pivot resistance lies at 1.2657, representing a 1.3 percent rise from current levels. That number is shortable with a stop-loss as tight as five ticks, but if it gives way easily, that would portend an even weightier exchange-rate burden on the nation’s already severely depressed economy. _______ UDPATE:  For the September contract, 1.2633 is equivalent to the target given above. It too is shortable. _______ FURTHER UPDATE (June 27): Bor-ing. We’ll put this one aside for now, since it has become a tiresome distraction.

$+BABA – Alibaba (Last:110.75)

by Rick Ackerman on November 21, 2014 3:32 am GMT

Based on my chat room post late in Thursday’s session, subscribers were able to stake out some small ‘Jackpot Bets,’ buying expiring calls at the 112 and 113 strikes for as little, respectively, as 0.21 and 0.15.  The latter options traded for as little as 0.10 yesterday before rocketing to 1.00 when Bahh-Bahh found traction after the opening and soared $5 in the space of an hour. It can, and often does, perform similar feats on a given day, and that’s why I would rather be long a few out-of-the-money calls for cheap on expiration day than short them. The goal of these jackpot bets, which we ordinarily initiate on Friday mornings in the first hour, is to cash out half of the options in the early going for twice what we’ve paid for them, assuming the opportunity arises. If successful, that leaves us with a risk-free chance to make perhaps 5 to 10 times our money.  In practice, subscribers have done this or even better numerous times, and even when things did not go our way they were able to do no worse than break even.

I’ve included a chart that suggests that, from a purely visual standpoint, a run-up to as high as 114.80 on Friday is hardly unlikely. We don’t need that to happen to make a nice score, however, since even if BABA rallies just $1.50 or so in the early going, there will likely be an opportunity to ‘double out’ on half of our positions.  If the stock opens lower on Friday there could still be a chance to get a jackpot bet down. However, I’d suggest doing so with options of a lower strike purchased for perhaps 0.20 or less.  Don’t bet more than you are comfortable losing, since this gambit is highly speculative. My guideline is to invest no more than you would on some 20-to-1 horse that you happened to like. _______ UPDATE (November 21, 4:00 p.m.): Subscribers reported gains of  300% to 800% on the trade suggested above. Quick, substantial gains were painlessly achieved after BABA spiked on Friday’s opening bar to 113.25 — 3.63 above the previous day’s close. The leap caused expiring 113 calls that subscribers had bought for as little as 0.15 less than a day earlier to trade for 0.90 in the early going — a sixfold increase. At the same time, calls at the 112 strike that subscribers reported buying for as little as 0.21 soared to 1.60.

$ESZ14 – December E-Mini S&P (Last:2050.25)

by Rick Ackerman on November 21, 2014 3:02 am GMT

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$GDXJ – Junior Gold Miner ETF (Last:27.24)

by Rick Ackerman on November 20, 2014 6:17 am GMT

GDXJ’s ups and downs are in ‘dueling’ mode at the moment, alternating between bullish and bearish feints. It was mildly bullish when the stock slightly exceeded the 129.30 target shown on Tuesday. However, yesterday’s slide also exceeded a Hidden Pivot target — in this case a hidden support at 27.21.  Taken together, the action suggests that this vehicle will spend the next few days marking time in the range 28-29. The picture would brighten on a thrust exceeding 29.20 on Thursday, since that would imply more upside to at least 31.24. Alternatively, a continuation of the downtrend past 25.67 would have equally bearish implications.

$DJIA – Dow Industrial Average (Last:17686)

by Rick Ackerman on November 20, 2014 3:47 am GMT

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USZ14 – December T-Bonds (Last:141^22)

by Rick Ackerman on November 17, 2014 12:06 am GMT

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$+DIA – Dow Industrials ETF (Last:177.73)

by Rick Ackerman on November 12, 2014 4:20 am GMT

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$IDAH – Idaho North Resources (Last:0.1600)

by Rick Ackerman on November 5, 2014 12:01 am GMT

Idaho North [OTC symbol: IDAH] offers investors a potentially lucrative synergy between two very successful entrepreneurs.  CEO Mark Fralich started out as a reporter with the Associated Press News Service but went on to co-found Spoval Fiber Optics before moving into the exploration business with Mines Management, Consolidated Goldfields Corp. and some other natural resource companies. Like most executives in the exploration business, he is an aggressive risk-taker. But he is also an astute bettor, perhaps never moreso than in his choice of Thomas Callicrate to head up his technical team.

Callicrate is bottled lightning, a geologist who may know more about ore deposits in Nevada than anyone else in the world. I counted no fewer than 250 file cabinets in the barn-size work buildings that surround Callicrate’s spectacular home in Carson City. He seems to have committed every geological map in those cabinets to memory, and he can tell you exactly where each and every rock came from in the massive stone fireplace that dominates his living room and in his beautifully landscaped gardens.  The fact that he chose to affiliate with IDAH attests to his confidence in Fralich’s ability to exploit to-the-max whatever ore deposits the company is able to find.

From a technical standpoint, the company’s shares have not traded for long enough to offer a sound basis for prediction. The stock has fluctuated between 0.08 and 0.24 since being OTC-listed in November 2013. That said, it would be no worse than an even bet to hit 0.3000 a share, nearly double its current price, if it can push past the red line at 0.2150. That’s a Hidden Pivot midpoint resistance, and it will remain valid as a minimum upside target for the near term unless the stock falls below 0.1300 first.

For news concerning two separate option agreements that IDAH recently signed, click here for the Green Monster property in Nye County, and here for Coeur Mining’s Klondyke properties.

$+SNIPF – Snipp Interactive (Last:0.3310)

by Rick Ackerman on October 28, 2014 2:47 am GMT

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This Just In... for Wednesday

Read here the confessions of a University of Illinois professor who at age 64 recently retired to fat city, courtesy of the state’s taxpayers. He’ll receive 80 percent of his salary for life, plus a three percent annual cost of living increase, but you  won’t believe some of the other perks that came with the job.


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