Last week’s 900-point Dow rally may have stirred up some bullish excitement on the Street and at CNBC, but it looked to us like a fat pitch for anyone who’s been waiting patiently to get short. We’ll be looking to do so ourselves next week — with as little risk and stress as possible, using index futures and or equity put options – so click here if you want a free pass to Rick’s Picks as we attempt this. You’ll have access not only to detailed trading recommendations that are updated around-the-clock, but also to a 24/7 chat room that draws experienced traders from all over the world. We hold no open positions in index futures at the moment, incidentally, although we established a bullish tracking position in gold last week just as Comex futures were starting to take flight. » Read the full article
We hold a single contract with an effective cost basis of 1708.00. A trailing stop would have gone into effect on a rally to 1770.00, but because the last upthrust fell $3 shy of that target, we’ve taken a $45 ride south on a fixed stop. This was unpleasant but consistent with our intention of holding the position come hell or high water. Even so, I’ll now suggest using a fixed stop at 1716.10, since it would be a crime to take an actual loss on a position that at one point had shown a paper profit of nearly $6000 per contract. If we’re stopped out, we can continue to get long whenever it suits us, risking little or nothing in theory each time, until we finally catch the Big Ride we’ve been waiting for. FYI, today’s carnage targets 1716.40, $5 beneath the so-far low.
Wall Street did not exactly take Apple out to the woodshed following yesterday’s revelation that the firm has paid little or no taxes on foreign income of $75 billion. The stock flinched, down $2.73 on the day, but investors seem to recognize that revising 275,000 pages of tax code to force Apple to pay its fair share will require many years of wrangling on Capitol Hill. And who’s to say that the effort would not leave other loopholes just as easily exploited by the Sunnyvale behemoth’s clever lawyers and accountants?
Technically speaking, however, the news seems to have sapped some of Apple’s vital juices, since the stock failed for the second consecutive day to decisively exceed a small but nevertheless significant ‘external’ peak at 445.36 (see inset). That feat, trivial though it may seem, will remain crucial to the short-term picture. If and when it is achieved, expect the stock to rise to a minimum 449.9o, a Hidden Pivot target. If the pivot is easily surpassed, look for the bullish momentum to continue till week’s end, at least. Camo traders should position from the long side, using the 15-minute chart for leverage.
Yesterday’s rebound in this vehicle was strong, although not quite as compelling as the one in Comex Gold futures. Moreover, the intraday low exceeded the midpoint support of the pattern shown by a decisive 52 cents, shortening the odds that its ‘D’ sibling at 22.25 will eventually be reached. We’ll give bulls the benefit of the doubt nonetheless, since mining shares are unlikely to languish if they catch their first whiff of strength in bullion in many months. From a Hidden Pivot perspective, this vehicle needs to keep running without taking a breath until 29.83 (a 5/14 peak) has been exceeded. Camouflageurs should look for entry opportunities on the 15-minute chart, since there are some choice ‘externals’ to be found therein.
Tesla got short-squeezed to within 28 cents of the 86.72 target I’d proffered early Monday morning, but a second-wind rally to 88.00 suggests it’s got eyes for 104.44, the ‘D’ target associated with the first number. It can serve as a minimum upside objective for now, implying that all trades between here and there be positioned from the long side. We’ll plan on buying weekly puts if and when the target is reached, provided it happens before Wednesday of the given week. Please note as well that a lesser Hidden Pivot at 94.19 (see inset) has the potential to stop the rally cold and can therefore be used for spec camouflage shorts.
All signs point higher at the moment, but even Google will have to top somewhere. My best-bet for a short-able apex is 929.78, the Hidden Pivot target of a well-defined ABCD on the monthly chart (see inset). You can try shorting with camouflage at that number, or at the D target (in purple) of the lesser pattern, but until then all trades should incorporate a bullish bias.