Monday, August 29, 2011

AAPL – Apple Computer (Last:383.72)

– Posted in: Current Touts Rick's Picks

We rarely goes against this stock, especially since its handlers never fail to shake buyers down whenever there's a news-driven opportunity like the recent bombshell concerning Steve Jobs.  However, because the 388.87 rally target shown in the chart looks enticing, let's take a small gamble, buying two September 350 puts if the stock gets within 15 cents of the target.  However, stop yourself out if the options trade for 0.25 less than you paid. _______ UPDATE:  We took a $50 loss when the stock blew past the target early in the session. The power of the move implies that AAPL is capable of 438.76 if and when it exceeds that Hidden Pivot midpoint's sibling on a closing basis for two consecutive days.

SLW – Silver Wheaton (Last:39.41)

– Posted in: Current Touts Rick's Picks

We hold the September 42/46/50 call butterfly spread four times for $1.04.  You can take this position off at will for 2.10 or more, although the stock will need to pop above 43 or so to give us a fighting chance to double our money. Note in the accompanying chart that even if the stock is carving out a head-and-shoulders pattern, there's still room for a pop into the mid-$40s before it tanks.  The longer it merely goes sideways, though, the less threatening the pattern will become. _____ UPDATE (September 14):  I'll record a $416 trading loss just to get this stinker off the sheets.  It could have been worse, since we legged into the first part of the position when the price of silver was freefalling.

GCZ11 – December Gold (Last:1823.50)

– Posted in: Current Touts Rick's Picks

Shortly before midnight, the futures had recouped about 40% of the $33 bull-trap selloff that greeted anyone who bought the opening bar Sunday evening.  The recovery high at this moment is 1826.30, but buyers will need to do just a little better, decisively exceeding a minor midpoint resistance at 1827.20, to put its ‘D’ sibling at 1845.60 in play. Nightowls looking for camouflage to get long should use an 1827.60 peak recorded at around 6:05 Sunday to set up an impulsive pattern with a point 'x' buy signal (see chart). The number for bulls to beat today is 1856.80, where lies a peak recorded last Wednesday on the way down. Anything above it would create a robustly bullish impulse leg on the hourly chart.

ESU11 – September E-Mini S&P (Last:1175.50)

– Posted in: Current Touts Free Rick's Picks

Friday's vicious short-squeeze -- triggered, apparently, by yet more Chauncey Gardiner talk from the chairman of the Federal Reserve -- looked like it was bound north for a Hidden Pivot resistance at 1201.00 when the music stopped on Friday. Its sibling midpoint resistance at 1167.00 appears to have become support, and therefore a base for the next push.  Camouflageurs may want to note that, as of around 7:25 p.m. EDT Sunday, the futures had created a beautifully disguised impulse leg that appeared to double-top with Friday's highs. As the chart shows, however, the move is impulsive and therefore a potential set-up for a very low-risk long entry.  I've sketched out a possibility, although a point 'C' low for the pattern we'd be trading has yet to occur. _______ UPDATE (11:10 p.m. EDT):  The camouflage pattern shown in the chart developed into a perfect trading opportunity when it tripped an 1177.00 entry signal 7:55 p.m. All three coordinates were single-bar, and the trade hit the 1178.75 midpoint for a “success” 40 minutes later.  If you kept a single contract after the trade became a “winner” at 9:20 p.m. (D=1182.50), hold for a minimum 1198.50, a minor ‘D’ target that looked like a lead-pipe cinch at 11:15 p.m. EDT. (A=1147.50 on Friday at 10:35 a.m.).  The 1210.00 target given above also remains valid, suggesting there will be considerable stopping power near the round number.

And they’re off!

– Posted in: Free Rick's Picks

Looking for clues as the new week begins, I waited for index futures to open Sunday night before posting touts.  Lo, the action is stagnant early in the evening, with the E-Mini S&P unchanged and December Gold off $13, trading around 1828.00, after DaSleazeballs short-squeezed the opening bar to 1841.50.  Monday is a travel day for me, but in my absence the chat room is all but certain to offer a rich vein of timely insights.

Prepare to Be Forgiven, Ye Mortgage Sinners

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

Although we waxed skeptical here the other day about Warren Buffett’s just-announced $5 billion stake in Bank of America, we allowed for the possibility that the deal will provide a handsome payoff to him no matter what happens to the bank.  B of A could implode, after all, a victim of sinking collateral values for its mortgage loans, and of litigation over its securitized-lending business.  There is also the wild card of homeowners challenging lenders in court to show clear title to properties that are in line for foreclosure. In fact, this issue alone has the ability to capsize the global financial system, since “clear title” is exactly what ceased to exist when the feather merchants of the banking world leveraged out real estate to-the-max earlier in the decade to create an $800 trillion derivatives edifice – the Mother Lode of Digital Money, as it were. All of that sum must be viewed at the moment as deflationary overhang, by the way – not to mention, a key stumbling point for those who argue that The Great Economic Crisis must eventually precipitate out as hyperinflation. So, how do you produce even mild inflation, let alone hyperinflation, with the housing market in a full-blown Depression?  Most surely not by expanding the capacity of banks to make mortgage loans. That’s been tried to death – first moderately, then aggressively, and finally desperately -- with zero success. Despite trillions of dollars worth of mortgage stimulus and supports both implied and real, the residential market looks even grimmer than it did a few years ago.  Existing-home sales fell 3.5 percent in July despite the fact that prices were 4.4 percent lower than in July 2010. Now that’s deflation. There’s also the $6.6 trillion loss of home equity that has occurred since the onset of the