Tuesday, August 23, 2011

We hold two September 400 calls for 2.27 -- the worst fill experienced by a subscriber on this trade apparently. The stock looks like hell, but only because its sleazy handlers want it to look that way.  Regardless of where they intend to turn AAPL around, we'll stick with the 1.70 stop-loss on the calls, o-c-o with an order to close out one of them for 4.10. Note:  If They pull out the rug, the next place I would look to buy the stock is at 338.88.  ______ UPDATE: We exited the calls for 1.70 -- and good riddance. They traded as high as 1.96 on a vicious  opening-bar head-fake, but plummeted to touch 1.70 within an hour.  By day's end, the calls had traded as low as 1.35.  Our theoretical trading loss was $114.

We hold the September 42/46/50 call butterfly four times for $1.04, and it has gone from a longshot bet to a 5-to-2 horse in the last two weeks.  Because the stock is coming up on two Hidden Pivots that have some potential stopping power, let's trade against our position by buying some puts. The targets lie, respectively, at 41.55 and 42.77, so I'll recommend buying four September 38 puts if the lower number is approached today within 4-6 cents.  Stop yourself out if SLW trades 41.71 or higher, but re-short using the September 40 puts if 42.77 is closely approached.

Price action at the moment is unworthy of our attention, but keep loosely in mind the midpoint resistance at 1163.25 if DaBoyz should succeed in getting a short squeeze going. They'll have plenty of opportunities to do so in the future, and we should never count the thieves out,  but at the moment, they seem burdened by the news. On the hourly chart, it would take 1165.00 -- slightly above our pivot -- to turn the short-term outlook bullish.

Silver got mired in a correction yesterday, evidently grown timid about following Gold's aggressive lead. Even so, the choppy action penetrated a 43.795 midpoint resistance to the upside, presumably clearing the way for an easy shot at its 'D' sibling, 45.110.  Night owls should consider bottom-fishing at the corrective midpoint shown, but please note that a downthrust that gets past the two labeled lows would create a bearish impulse leg of lesser degree (and also another possible buying opportunity at the 'p' midpoint or 'd' target of the pattern).

Very impressive indeed.  The futures backed off our upper target yesterday by $40, only to come roaring back by $56 to make a new intraday high.  The high occurred just $1 from the target shown, suggesting that although this phase of the bull market may sometimes seem diabolical, it is actually impeccably behaved from a Hidden Pivot perspective. Traders should probably do their targeting on the three-minute charts or less, since Gold's rallies are becoming increasingly fleeting, its pullbacks more and more punitive. For timely analysis, though, let me proffer as a minimum upside objective for the near term a 1957.50 target that comes from the 240-minute chart.  Here are the coordinates for your further information:  A=1585.90 (July 22); B=1817.60  (August 10); and C=1725.80.  Alternatively, a subtle warning signal would be flashed on a print overnight below 1883.30.

[In the daily give-and-take of the Rick’s Picks forum, Mario Cavolo, an American expatriate living in Shanghai, is the perennial optimist, sort of. While hardly unmindful of America’s steep decline, he sees offsets in a rising global middle class, particularly in India and China, and in an upper-class America that will continue to flourish even in hard times.  Skeptical though we are sometimes about his thesis, we must admit that a drive through Palm Beach, Florida, the other day reminded us that there are concentrations of wealth in this country so deep that even if 90% of it were to vanish tomorrow, the super-rich will still be driving Bentleys and shopping on Worth Avenue and Rodeo Drive.  For a summation of Mario’s thoughts as U.S. stocks continue their descent into Hell, read on. RA] Let's begin this commentary by asking exactly what specific Lehman-type crisis recently occurred or will occur to justify the nasty global equities decline and its continuation as, perhaps, the 2011-2012 Crisis? We can quickly dismiss the idea that it was Standard & Poor’s credit downgrade of U.S. debt.  I mean, come on folks, it has been beyond obvious that global credit markets are awash in debt and therefore higher-risk. Things were known to be bad before the downgrade, and the downgrade itself did not make the fundamental problems any worse. The credit downgrade was a message to Washington, long overdue, but it probably did more to soil S&P’s reputation, since it is still well recalled that the firm rated sub-prime junk as triple-A a few years back. So let’s move on to more substantive issues to identify what is wrong with the  global economy right now. Can we say it was the recent "realization" that Washington bankers and politicians have been pillaging the financial system greedily?