Wednesday, August 10, 2011

SFU11 – Swiss Franc (Last:1.3738)

– Posted in: Current Touts Rick's Picks

A Big Mac now costs a little more than $17 U.S. in Zurich, according to an item posted at ZeroHedge.  While this is going to make it easy for Swiss travelers to splurge in the U.S., it's bound to put a crimp in their sales of Patek Phlillipes and Rolexes, cheese, chocolate, high-precision machinery and, of course, Swiss Army knives. Check out the chart if you want to see what the world's hardest currency looks like -- not that the Swiss prefer it that way.

IBM – IBM Corp. (Last:170.71)

– Posted in: Current Touts Free Rick's Picks

We hold the August 175-170 put spread twice for a 0.05 debit and are also long the 170-175 call spread twice for an effective credit of 0.65 each. We arrived at this position by buying the call spread twice for 1.00 when we already held two August 175 calls. We were able to reshort the August 175 calls later in the day for 1.65, giving us the $5 vertical call spread for a 0.65 CREDIT. We stand to make as much as $1120 in theory if IBM is trading 170 or above at expiration, but no matter where the stock is trading, our minimum theoretical gain would be $990. We've worked hard to time the swings for good prices on all of the options we either bought or sold, so no further action will be required.

SIU11 – September Silver (Last:38.500)

– Posted in: Current Touts Rick's Picks

With a minor, unachieved correction target at 35.660, Silver looks vulnerable. (You can bottom-fish there with a tight stop-loss. ) Bulls and bears have created 'dueling' impulse legs on the hourly chart, but it would take a print at 40.755 today for the good guys to gain the upper hand.  That's a tick above a tiny look-to-the-left peak that doesn't even express itself as such on the hourly chart (see inset).

ESU11 – September E-Mini S&P (Last:1171.00)

– Posted in: Current Touts Rick's Picks

After-hours trading has pushed the futures slightly above a look-to-the-left peak at 1178.25, creating a possible opportunity to get long via camouflage. A proper pullback would need to come down to at least 1146.00, but if and when this occurs, Pivoteers should look to get long on a conventional 'X' trigger.  In the accompanying chart, I've sketched out a hypothetical scenario for your further guidance.

DJIA – Dow Industrial Average (Last:11240)

– Posted in: Current Touts Free Rick's Picks

Yesterday's 600-point bounce created bullish impulse legs on the lesser intraday charts although -- surprisingly -- not on the hourly chart (see inset).  I see little value in putting out trading points ahead of whatever wildness obtains on Wednesday. However, a 50% retracement of the plunge from July 22's peak would put the Dow at 11678, while a 61.8% retracement would imply 11931. We can use the lower number as a minimum upside objective for this dead-cat bounce, but either number can be shorted using camouflage.

Risks, Opportunities Rise with Bear’s Re-Emergence

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

Twenty-nine months into the Mother of All Bear Rallies, it was unlikely that mere mortals would predict the precise start of the stock market's collapse, inevitable and long overdue though it may have seemed.  However, no one should be surprised by the selloff’s ferocity, nor by the prospect that the first wave down may have run its course in mere days. Traders who have been waiting for the Big One for years undoubtedly are re-discovering how hard it can be to reap a windfall even when you are right about the trend. We think shares still have a long, long way to fall, although we harbor no illusions that the Mother of All Bear Markets will be easy pickings. That much should have been obvious yesterday, for not even bears with brass cahones could have withstood a spectacular short-squeeze rally that saw the Dow trampoline from lows around mid-morning to a final-bell peak 600 points higher. Five hundred of those points came in the final hour alone. The proximal cause of this wilding spree was a Fed announcement that short-term rates would be held near zero through mid-2013.  Although no one, not even Paul Krugman, could believe at this point that more easy credit will have a positive effect on the economy, traders bought the news anyway. As we have explained here many times before, they did so not because the news was bullish, but because they expected others traders to react as though it were. Bears would have found it no easier to catch a ride south a week ago, when the onslaught of selling began.  Three days earlier, on Friday, a strong rally trapped bulls and wrung out bears. But the hook was set Sunday night when news of a debt-limit deal sent index futures into a second