November 23rd, 2014
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Weekly Commentary

If DaBoyz can squeeze a 500-point Dow rally out of yesterday’s administered easing of dollar “swap” rates, just imagine what they can do with a little Santa seasonality and a dollop of year-end window-dressing.  Let’s be straight about a couple of things. First, no one expects the latest easing of global credit lines to resolve Europe’s debt crisis. And second, the 800 points the Dow has tacked on this week represent little more than trading machines masturbating each other amidst a short-covering panic. Some observers merely yawned, noting that the swap arrangements that make it easy and cheap – and now even easier and cheaper, if such a thing were imaginable — for foreign banks to borrow dollars have been in place since 2007.  However, others saw the announcement by the central banks as nothing less than a bold step by the Federal Reserve to begin monetizing the debt of Spain, Italy, Greece, France et al.

It’s a moot point whether the U.S. has begun bailing out Euro-deadbeats, however, since the U.S. is a deadbeat itself, albeit one in sole possession of the world’s reserve currency and therefore of the ability to gin up unlimited quantities of the stuff at will. Meanwhile, there’s little point in pretending that the U.S. is somehow not immersed in the bubbling cauldron of toxic global finance. U.S. banks had stopped lending to their European counterparts, and that’s why the Fed stepped in to pretend it has the situation under control. This may work for another week or so, if that long, but it’ll be interesting to see whether reducing swap rates to near-zero will help suppress sovereign borrowing rates that recently topped the 7% “red zone” for Italy. Would you lend the Italian government hundreds of billions of dollars at 7%? That’s what we thought. But if you live in Europe or the U.S., you’ll be doing it anyway – and for a lot less than 7% –courtesy of the bankers.

A Hyperinflationary Step?

Not to spoil the party, but we’d suggest keeping a close eye on T-Bond futures rather than on a criminally insane Dow Industrial Average that has obviously run amok.  U.S. Bonds and Notes have been in a sharp correction, with the former closing on a key Hidden Pivot target of ours at 140^14.  The target is so clear and compelling that its breach would offer strong evidence that the Fed’s increasingly desperate attempts to hold deflation at bay are about to finish the dollar’s destruction since the Fed was created nearly 100 years ago.  We’re planning on bottom-fishing near the target (click here to join us – at no cost to you), but if it the “hidden support” is exceeded even slightly, it could be signaling a significant global increase in inflationary pressures.

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TODAY'S ACTION for Thursday

Bankers’ Best-Laid Plans

by Rick Ackerman on December 1, 2011 5:29 am GMT

The markets were suspiciously subdued Wednesday night, but don’t be surprised if buyers are back on Thursday to pursue their bliss.  It ishardly implausible that those who planned yesterday’s liquidity announcement did so on a Wednesday because they believed it might be too ambitious to get a short-squeeze going as early in the week as Tuesday.


Rick's Picks for Thursday
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ECZ11 – December Euro (Last:1.3460)

by Rick Ackerman on December 1, 2011 3:14 am GMT

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ESZ11 – December Mini S&P (Last:1244.25)

by Rick Ackerman on December 1, 2011 3:25 am GMT

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GCG12 – February Gold (Last:1749.60)

by Rick Ackerman on December 1, 2011 3:38 am GMT

February Gold (GCG12) price chart with targetsWe’re long  two contracts, from an initial position of four, with an effective cost basis of 1733.00. Look to exit one of those contracts at 1758.00, a few ticks below the ‘D’ target of the ‘camo’ pattern we used to get on board. (Note: Initial entry was via the December contract, but we rolled the position intraday into February.) Since we’re swinging for the fence on this trade, I’ll suggest a 1733.30 stop-loss for now, one-cancels-the-other with the closing offer of one contract at 1758.00.  Upside potential is to 1869.80, the ‘D’ target of the big pattern shown. Its sibling p midpoint lies at 1770.20, so we’ll make that our minimum upside objective for the near term. A two-day close above it would make 1869.80 an odds-on shot. _______ UPDATE (6:28a.m. EST):  We exited on the overnight high, 1758.00, before the futures dropped back by $10.  This leaves us with a single contract whose cost basis is 1708.00. A 1704.20 stop-loss is suggested for now.

SIH11 – March Silver (Last:32.735)

by Rick Ackerman on December 1, 2011 3:46 am GMT

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Small Details of a Monster Rally

by Rick Ackerman on December 1, 2011 2:40 pm GMT

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$+BABA – Alibaba (Last:110.75)

by Rick Ackerman on November 21, 2014 3:32 am GMT

Based on my chat room post late in Thursday’s session, subscribers were able to stake out some small ‘Jackpot Bets,’ buying expiring calls at the 112 and 113 strikes for as little, respectively, as 0.21 and 0.15.  The latter options traded for as little as 0.10 yesterday before rocketing to 1.00 when Bahh-Bahh found traction after the opening and soared $5 in the space of an hour. It can, and often does, perform similar feats on a given day, and that’s why I would rather be long a few out-of-the-money calls for cheap on expiration day than short them. The goal of these jackpot bets, which we ordinarily initiate on Friday mornings in the first hour, is to cash out half of the options in the early going for twice what we’ve paid for them, assuming the opportunity arises. If successful, that leaves us with a risk-free chance to make perhaps 5 to 10 times our money.  In practice, subscribers have done this or even better numerous times, and even when things did not go our way they were able to do no worse than break even.

I’ve included a chart that suggests that, from a purely visual standpoint, a run-up to as high as 114.80 on Friday is hardly unlikely. We don’t need that to happen to make a nice score, however, since even if BABA rallies just $1.50 or so in the early going, there will likely be an opportunity to ‘double out’ on half of our positions.  If the stock opens lower on Friday there could still be a chance to get a jackpot bet down. However, I’d suggest doing so with options of a lower strike purchased for perhaps 0.20 or less.  Don’t bet more than you are comfortable losing, since this gambit is highly speculative. My guideline is to invest no more than you would on some 20-to-1 horse that you happened to like. _______ UPDATE (November 21, 4:00 p.m.): Subscribers reported gains of  300% to 800% on the trade suggested above. Quick, substantial gains were painlessly achieved after BABA spiked on Friday’s opening bar to 113.25 — 3.63 above the previous day’s close. The leap caused expiring 113 calls that subscribers had bought for as little as 0.15 less than a day earlier to trade for 0.90 in the early going — a sixfold increase. At the same time, calls at the 112 strike that subscribers reported buying for as little as 0.21 soared to 1.60.

$ESZ14 – December E-Mini S&P (Last:2050.25)

by Rick Ackerman on November 21, 2014 3:02 am GMT

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$GDXJ – Junior Gold Miner ETF (Last:27.24)

by Rick Ackerman on November 20, 2014 6:17 am GMT

GDXJ’s ups and downs are in ‘dueling’ mode at the moment, alternating between bullish and bearish feints. It was mildly bullish when the stock slightly exceeded the 129.30 target shown on Tuesday. However, yesterday’s slide also exceeded a Hidden Pivot target — in this case a hidden support at 27.21.  Taken together, the action suggests that this vehicle will spend the next few days marking time in the range 28-29. The picture would brighten on a thrust exceeding 29.20 on Thursday, since that would imply more upside to at least 31.24. Alternatively, a continuation of the downtrend past 25.67 would have equally bearish implications.

$DJIA – Dow Industrial Average (Last:17686)

by Rick Ackerman on November 20, 2014 3:47 am GMT

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USZ14 – December T-Bonds (Last:141^22)

by Rick Ackerman on November 17, 2014 12:06 am GMT

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$+DIA – Dow Industrials ETF (Last:177.73)

by Rick Ackerman on November 12, 2014 4:20 am GMT

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$IDAH – Idaho North Resources (Last:0.1600)

by Rick Ackerman on November 5, 2014 12:01 am GMT

Idaho North [OTC symbol: IDAH] offers investors a potentially lucrative synergy between two very successful entrepreneurs.  CEO Mark Fralich started out as a reporter with the Associated Press News Service but went on to co-found Spoval Fiber Optics before moving into the exploration business with Mines Management, Consolidated Goldfields Corp. and some other natural resource companies. Like most executives in the exploration business, he is an aggressive risk-taker. But he is also an astute bettor, perhaps never moreso than in his choice of Thomas Callicrate to head up his technical team.

Callicrate is bottled lightning, a geologist who may know more about ore deposits in Nevada than anyone else in the world. I counted no fewer than 250 file cabinets in the barn-size work buildings that surround Callicrate’s spectacular home in Carson City. He seems to have committed every geological map in those cabinets to memory, and he can tell you exactly where each and every rock came from in the massive stone fireplace that dominates his living room and in his beautifully landscaped gardens.  The fact that he chose to affiliate with IDAH attests to his confidence in Fralich’s ability to exploit to-the-max whatever ore deposits the company is able to find.

From a technical standpoint, the company’s shares have not traded for long enough to offer a sound basis for prediction. The stock has fluctuated between 0.08 and 0.24 since being OTC-listed in November 2013. That said, it would be no worse than an even bet to hit 0.3000 a share, nearly double its current price, if it can push past the red line at 0.2150. That’s a Hidden Pivot midpoint resistance, and it will remain valid as a minimum upside target for the near term unless the stock falls below 0.1300 first.

For news concerning two separate option agreements that IDAH recently signed, click here for the Green Monster property in Nye County, and here for Coeur Mining’s Klondyke properties.

$+SNIPF – Snipp Interactive (Last:0.3310)

by Rick Ackerman on October 28, 2014 2:47 am GMT

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