Friday, August 5, 2011

A Good Time to Be a Leo

– Posted in: Free Links Rick's Picks

Someone mentioned during yesterday's impromptu trading session that those born under the sign of Leo (as I was, on July 30, along with Schwarzenegger, Lisa Kudrow and Peter Bogdanovich) might be in for a rough time, at least for a while. Since I had just read a horoscope that predicted just the opposite, let me share it with you here: "This could be an incredible period of creativity for you. In addition, romantic feelings and desires to both give and receive affection are powerful. Growth for you this month can come from developing deep feelings of devotion for those in your personal life as well as profound compassion for the pain and suffering of others even if you don’t know them on a personal basis." To access the full text of astrologer Rio Olesky's monthly analysis, click here.

IBM – IBM Corp. (Last:171.51)

– Posted in: Current Touts Free Rick's Picks

We hold the August 175-170 put spread twice for a 0.05 debit.  That means the most we can lose is $5 per spread, or $10 total, while we stand to gain as much as $495 per spread if the stock is trading 170 or lower when the options expire on August 19.  Although I'd like to close out one of the spreads today for around $260, the gap between bid and asked for the puts is so wide that a less-than-stellar execution could cost us as much as $25 per spread.  If you can get the spread off at that price without having to leg it, that's what I'll suggest.  Please let me know via e-mail or in the chat room, though, since it will give me a better idea of the capabilities of those who are trading my option recommendations.  Otherwise, we'll attempt to leg out of half the position, buying an Auggie 170 put to close if the opportunity presents itself.  Stay tuned for an intraday alert!  Shortly before 4 a.m., the stock was approaching a Hidden Pivot support at 170.34.  I hesitate to suggest bottom-fishing our way out of the spread at that price, though, because it is so close to the 170.63 launching pad whence Big Blue surged to its 185.76 high. My reasoning is that a breach of 170.63 would likely run enough stops to take it below the 170.34 Hidden Pivot. _______ UPDATE (1:56 p.m. EDT):  We've done nothing officially yet, although the spread could have been exited for as much as $350 this morning when IBM was getting bombed. For the record -- and I am not proud to be bringing you this fact belatedly, when it will do you no good -- an easy way to have effectively "covered" the put spread would

CLU11 – September Crude (Last:86.33)

– Posted in: Current Touts Rick's Picks

An 85.07 target given here previously is still viable and can be bottom-fished using camouflage. I'd suggest you start looking for the turn from around 85.30 on down.  If this Hidden Pivot is breached decisively, though, we'll be looking at a prospective fall to 75.19. (A=115.60 on May 2.) ______ UPDATE (11:35 a.m. EDT): Sellers obliterated the Hidden Support at 85.07, greatly shortening the odds of a continuation down to 75.19.  This will obviously weigh on Gold, but it would be bullish for Gold if its percentage loss proves to be less than Crude's.

USU11 – September T-Bond (Last:134^11)

– Posted in: Current Touts Rick's Picks

Wow!  The futures have blown through a major Hidden Pivot resistance at 132^27 so easily that the continuation of the bull market seems all but certain. For the present, I've extrapolated one last rally target at 135^13 from the 240-minute chart (see inset), but it will require a continuous chart to project any higher.  The weekly chart is easily up to the task and envisions as high as -- are you sitting down for this? -- 143^11!  (A=88^12 on June 15, 2007).

SLW – Silver Wheaton (Last:33.40)

– Posted in: Current Touts Rick's Picks

Trying to squeeze the last dime of risk from our butterfly spread will cost us, since the eight September 46 calls we were looking to short for 0.79 are now trading for around 0.37.  In any event, I'll recommend that you offer them short today for 0.45 -- two for each pair you hold of Sep 42/Sep 50 calls. If we get our price we'll have four Sep 42/46/50 call butterflies with $400 of profit potential each and a maximum loss of no more than $68 -- still pretty good odds. Our maximum profit would come if the stock recovers into the mid-40s by early to mid-September.  FYI, the nearest Hidden Pivot support where we might expect a strong turn this morning lies at 34.23 -- 31 cents beneath yesterday's bottom.   If I revise the strategy given above, I'll signal in the chat room intraday and also mail out an alert to all who are signed up to receive them.  (You can do so by clicking on "Contact Us" on the home page.) _______ UPDATE (11:23a.m. EDT): The stock gapped up to 36.10 on the opening today, making the September 46 calls an easy short at 0.45, since they were worth more than 0.60 at the high. We now hold four September 42/46/50 call butterfly spreads for a 0.68 debit apiece. Do nothing further for now. The stock looks bound for a Hidden Pivot support at 31.74. (60m, A=40.50 on July 25 at 9 a.m. EDT, B=35.43 on July 25 at 10 a.m.) _______ FURTHER UPDATE (1:22 p.m. EDT):  I'm retracting the short sale of September 46 SLW calls, since I've just heard from a subscriber who had a 0.45 limit order go unfilled. My guess is that the market makers read SLW's head fake perfectly and were unwilling

ESU11 – September E-Mini S&P (Last:1195.50)

– Posted in: Current Touts Rick's Picks

If the 1184.75 Hidden Pivot shown in the chart fails to temporarily arrest the decline, look for more slippage to as low as 1154.25, or perhaps 1146.75, over the near term.  Camouflage is essential regardless of whether you're on the long side or the short, but if you attempt the latter, because the downtrend holds every trader in thrall by now, your best bet will likely be to initiate on subtle breakdown from sideways moves.

DJIA – Dow Industrial Average (Last:11384)

– Posted in: Current Touts Free Rick's Picks

The weekly chart shows how yesterday's plunge created a bearish impulse leg by exceeding the required internal and external lows.  The price bar itself doesn't look like much in the context of this very big picture, but it is ominous nonetheless that it has followed a bull cycle that failed to surpass the 13187 peak from May 2008.  By definition, that means the entire Mother of All Bear Rallies from the 2009 low is merely corrective relative to that peak.  The resulting, bearish ABCD pattern gives us a Hidden Pivot midpoint to use for a minimum downside target: 9542, representing a further fall of about 16 percent. To be sure, there are lesser uptrends yet to play out against the larger, bearish tableau; however, we now have an especially compelling reason to look for ways to get short at their respective midpoints and 'd' targets.  Camouflage, anyone?