Wednesday, July 20, 2011

Finer Points of Camouflage

– Posted in: Tutorials

The emphasis during this session was on spotting camouflage opportunities and steering clear of traps in real-time charts for Gold, Silver, Corn and the E-Mini S&Ps. Although it will nearly always be possible to force a long or short trade in some time frame, we can reduce stress and effort by initiating trades only when they are based on impulse legs that conform strictly to our rules. In particular, we should expect to find the best – and easiest – trades at swing highs and lows that have been signaled on charts of higher degree. In all instances, finding the first such signal amidst the panic, fear and uncertainty of others will afford the most trouble-free path to success.

GS – Goldman Sachs (Last:136.89)

– Posted in: Current Touts Rick's Picks

In the chat room yesterday, a longtime subscriber said he liked the risk:reward for bottom-fishing in Goldman shares right now. I'll suggest holding off until GS hits the 122.72 Hidden Pivot target shown in the chart. If it happens within the next two weeks, you should buy two September 125 calls.  Since there are so many ABC patterns that could produce alternative lows, however, I won't stand in the way of camouflageurs diligent enough to look for the turn from current levels on down. _______ UPDATE (9:59 a.m. EDT): The rally from yesterday's heavily manipulated, gap-down low looks like a distributive fraud to me because the initial run-up failed to exceed a modest shelf of supply created during the final two hours of Monday's session. Although the stock has finally lifted above that shelf this morning, it is revealing underlying weakness in having failed to do so on the first attempt. _______FURTHER UPDATE (early Thursday):  The stock came at shorts with a vengeance yesterday, but it will need to push above the May 31 peak at 142.30 before we're obliged to give it any respect. Since that is not inconceivable, camouflageurs are advised to look on the 15-minute chart for opportunities to get long. ______ FINAL UPDATE for now (July 26, 12:30 p.m. EDT): We'll put this gambit aside, reminding ourselves from time to time that when the deft mechanics who control this stock have shorts by the cahones, they don't let go.

Too Corny to Be True?

– Posted in: Free Rick's Picks

Rick's Picks is warming to the idea of a bullish play in Corn, the subject of an urgent 'hot tip' that we received in Tuesday's e-mail.  However, our plan is to play it strictly by-the-book, risking as little as possible if the tip doesn't pan out (as frequently occurs).  Click here if you don't subscribe but are motivated nonetheless to find out exactly how we do things around here.  Trading should be fun, don't you think?

CU11 – September Corn (Last:705.25)

– Posted in: Current Touts Rick's Picks

Here's a hot tip I've received on Corn from a source that has been nicely ahead of some big commodity moves:  "Do not ignore this trade," he advised in an urgent e-mail message.  "It's gonna make a 'sugar move.' "  As you may already have surmised, the source called sugar's explosive rally almost to-the-day.  Nonetheless, I'm going to downplay the hot-tip aspect here and simply focus on Corn by-the-numbers. My goal is to allow you to test the water without suffering much damage if the tip doesn't pan out.  However, if you're eager to play and cannot wait for such perfect opportunities as I might hope to identify, then by all means take your best shot using camouflage. For the moment, however, I'll suggest zooming no lower than the five-minute chart to secure a cheap boarding pass. The look-to-the-left peak I've identified at 734.50 would be ideal for such a purpose, assuming it is exceeded by just a tick or two before giving way to a fleeting b-c correction.  Do not take this trade, however, if you cannot identify the point 'A' of the larger, bullish pattern on which our 'camo' entry would be based. (Hint: It occurred months ago but can still be found in the hourly chart.) Remember, the best camouflage entry spots are signaled on charts of a higher degree than the ones we actually use to get long or short.  One final note: My source is playing the December contract on speculation that a crop bust this fall will trigger an explosive move.

IBM – IBM Corp. (Last:185.19)

– Posted in: Current Touts Rick's Picks

We hold two August 175 puts acquired for 1.20 near the so-far top of one of the most manic rallies in this stock's illustrious history.  This is a speculative play, akin to yelling "Stop!" as a speeding freight train bears down on us. That said, the pattern that produced the target we've shorted is sufficiently compelling to suggest we're aboard near 'a' top if not 'the' top.  Do nothing further for now but stay tuned, since we'll want to short some puts of a lower strike against the ones we own if the stock corrects sharply. Please note  as well that 187.55 is possible before the stock turns lower. That is the 'D' target of a pattern less significant than the one yielding the original one at 183.35 (see chart), and its attainment would represent a minor-trend extension of a major trend as sometimes occurs. _____ UPDATE (12:12 p.m. EDT): With IBM getting butchered today off the bull-trap high  it achieved Sunday night on word of a budget "deal," I'll recommend shorting an August 170 put at-the-market for each August 175 put you hold. This will give us a $5 vertical put spread for nothing, or close to it.

ESU11 – September E-Mini S&P (Last:1322.75)

– Posted in: Current Touts Free Rick's Picks

In volumeless after-hours trading, DaBoyz have sleazed the futures above the 1323.25 peak that had resisted their depredations during the regular session. This is the threshold I'd said would need to be surpassed in order to refresh the bullish energy of the intraday charts.  Now that this has occurred, it will shift the focus to a Hidden Pivot resistance at 1340.00 that can serve as our minimum upside objective for the near term.  This is not a place to try shorting (other than via camouflage, of course), but to observe the degree of difficulty, or perhaps ease, with which the resistance is surmounted. If it is quickly brushed aside, however, that would put into play its 'D' sibling at 1388.75 -- equivalent to a 500-point Dow rally from these levels. You're just six hours from learning how to forecast stock and commodity prices better than some gurus who do it for a living. Click here to find out how -- and save $50 on next month's Hidden Pivot Webinar.

SIU11 – September Silver (Last:38.605)

– Posted in: Current Touts Rick's Picks

September Silver has gotten waylaid enroute to a 42.475 target after attempting to consolidate above the target's sibling midpoint, 40.180. Before making any judgments about the seriousness of this weakness, we should wait to see how the first corrective pattern plays out relative to its 'p' midpoint pivot and 'd' target. (I've gone into much greater detail about this in today's Gold tout, which includes a chart.) For now, though, and until such time as 37.890 (aka point 'C') has been exceeded to the downside, the bullish target noted above will remain valid.  _____ UPDATE (10:11a.m. EDT): Weakness that has persisted overnight looks like it will take the futures down to at least 37.610, a Hidden Pivot support, or to another at 37.125 if any lower. Both targets can be easily found on the 15-minute chart.

GCQ11 – August Gold (Last:1586.90)

– Posted in: Current Touts Rick's Picks

The unmitigated viciousness of gold's recent price action should have made its impression by now on all who trade it. As I tried to emphasized in yesterday's commentary, the evasive maneuvers are becoming increasingly tricky because there are evidently a growing number of bulls who have grown all too certain that quotes can only move higher over time. Gold's job is to make sure these folks don't get the idea that one need only buy gold at any price, and at any time, to get rich the easy way.  For our part, we'll want to pay closer attention than ever to impulse legs on charts of lesser degree -- and to buy the stuff, and hedge it, whenever Hidden Pivot Analysis supports our goals.  Keep in mind that we will never have to be nervous bulls if we can put aside our emotional attachment to bullion and simply heed what impulse legs in various time frames are telling us. It never has to be more difficult or complicated than that. Most immediately, we should take note that the selloff begun (at 4 a.m. EDT!) from yesterday's head-fake top is impulsively bearish on the hourly chart (though not on the '240,' which would require a fall to at least 1575.90). Moreover, the decline has occurred without the August contract having achieved a 1626.30 target that goes back to A=1415.50, April 1, on the daily chart.  This is a yellow flag, and it can be retracted -- or perhaps replaced with a red flag -- only after  the futures have resolved the corrective pattern shown (or something like it; it's hypothetical).  This could happen in at least several ways:  1) ideally, via a reversal from the c-d midpoint; 2) less bullishly, via a reversal from 'd';  or, 3) bearishly, via an overshoot

3 Key Stocks Head-Butt Major Hidden Pivot Targets

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

If a millennial tide of Fed funny-money can push the broad stock averages higher no matter what the economic climate, just imagine what it can do for the shares of companies with strong earnings growth in these recessionary times. In particular, Google, IBM and Apple have soared in recent days on stellar Q2 reports and giddy rumors. Yesterday it was Big Blue that took flight, gapping up five percent on news of exceptional top-line growth.  Even better for investors was that the company expects this growth to continue for at least the rest of 2011 in all of its lines: hardware, software and business services. We wrote here a long while back that IBM bonds were probably a safer and better bet than U.S. Treasurys, and we still think this is so. There were a few other blue chip companies on our short list that one could imagine will do pretty well even if economic activity in the U.S. sinks to depressionary levels. Johnson & Johnson, Disney, Caterpillar, 3M and Safeway come to mind, as well as Apple, which, despite its pricey merchandise, stands to rake in tens of billions of dollars over the years from nickel-and-dime sales of iTunes to an imponderably large number of music lovers. Google’s explosive short-squeeze came earlier in the week, when the stock gapped from 529 to 598 overnight – that’s nearly 14%! -- on the sensational earnings report that nearly everyone must have expected. Apple’s numbers were to have been reported after the close on Tuesday, but the stock seemed uncharacteristically subdued ahead of the announcement. This is probably because AAPL, even more than GOOG or IBM, has spent the last few weeks discounting the best news anyone could imagine.  Apple shares that traded as low as 310 on June 20 have since