Have you taken a trading course — or two, or three — only to find yourself still struggling years later to achieve profitability? Maybe you’re someone with virtually no knowledge of the stock market looking for an alternative source of income if the economy should crash. You could also be bored housewife keen on using your mornings more productively. Or a college grad with no job prospects…or a laid-off factory worker…or a Realtor worried about very tough times ahead. Or a Louisiana shrimper looking for an easier life. Or a guy who’s tired of living with his mother…or of being hounded by loan sharks. If so, Rick’s Picks invites you to apply for a full scholarship to the Hidden Pivot Webinar scheduled for January 11-12. Three stipends worth $990 apiece will be awarded. However, this particular class, as well as the post-grad perks you’ll receive, will go beyond anything we’ve offered in the six years » Read the full article
This demo was done at the invitation of TradersLog.com and starts with a brief explanation of the Hidden Pivot Method. We then took a close look at some key charts that provide clues concerning how the global financial crisis might play out. Our focus was on long-term charts for T-Bonds, U.S. stocks, the dollar and the euro. The conclusions we drew are somewhat counterintuitive, most particularly a prediction that the euro will not crash when the PIIGs eventually default.
Reputable sources reported that yesterday’s mini-crash in gold was orchestrated by sellers that included the U.S. Fed, the BIS and the Bank of England. Under the circumstances, with the central banks doing their sleazy best to temporarily overwhelm sharp rallies in bullion, we can’t be too careful initiating trades in gold or in managing position risk once we’re aboard.
Accordingly, today’s Gold tout is accompanied by a chart that shows numerous possibilities and potential camouflage opportunities. Our objective is to get long, but only at such times as we can pare risk down to a bare minimum, and only when the entry signal meets our criteria precisely. Considering the bullish triangle that has been developing for months on Comex Gold’s daily charts, seizing the opportunity is akin to reaching beneath a guillotine to retrieve a 10 carat diamond.
Yesterday’s bull trap created an impulse leg with immediate downside potential to 1210.00. The pattern is less than compelling but clear enough nonetheless to warrant bottom-fishing via camouflage at 1228.25. That’s the target’s midpoint sibling, and it promises to at least blunt the onslaught begun from Thursday morning’s fleeting high. Alternatively, on a bullish turn, camouflageurs could try leveraging a pullback from the 1246.75 peak labeled in the chart. _________ UPDATE (9:11 a.m. EST): The 1228.25 support came within a single tick of nailing the overnight low, so I am establishing a tracking position for your further guidance. Although a bid at 1228.25 would have just missed, the ‘camo’ pattern that followed the reversal we’d anticipated was absolute perfection on the 30-minute chart (A=1228.50, B=12432.75, C=1235.75). Entry was signaled at 1239.50, and profits taken on half the position (i.e., two contracts) at the p midpoint, 1243.00. The subsequent thrust to ‘D’ at 1250.25 fell two ticks shy of being a “winner,” and so we hold two contracts with a cost basis of 1236.00. Use a fixed stop-loss at 1235.50 for now, but switch to a 4.00-point trailing stop on the single contract that would remain if 1267.00 is hit. I am not recommending that you carry the position over the weekend, so if 1267.00 is reached in the final hour, take the money and run. _______ FURTHER UPDATE (11:53 a.m. EST): The futures have wafted above our “winner” threshold at 1250.25, allowing us to exit a third contract and keep one with a paper profit-adjusted cost basis of 1228.75. My short-term target is now 1259.25, implying that a too-tight 1.50-point trailing stop would be in effect from the so-far high at 1255.25. My suggestion is to play it as you please, but to use a “structural” stop at 1246.50 whose provenance is clear on the one-minute chart._______ AND YET ANOTHER (1:14 p.m. EST): In the chat room just now, I’ve suggested taking some QQQ puts home for the weekend. Buy January 54 puts if and when the December E-Mini S&Ps trade at or near the 1259.25 target. The equivalent target for the march contract is 1253.50.
It is 20 minutes from Friday’s close, and chat-roomers have reported buying QQQ Jan 54 puts and Jan 53 puts, respectively, for 0.74 and 0.96. These buys came with the E-Mini futures trading within a hair of the rally targets I’d furnished for the December and March contracts. I am establishing a tracking position for both of these options, but for now, just sit tight.
The midpoint pivot at 101.28 that I’d flagged yesterday in the chat room as a place to try bottom-fishing appears to have served subscribers well. Several subscribers have reported getting long at that price ahead of the so-far 88-cent rally that has ensued. This morning’s low never exceeded the pivot by more than eight cents, and the rally since could have produced a gain of as much as $800 per contract for anyone who was aboard. Because of the fills that were reported, I’m going to establish a tracking position for your further guidance. Assuming four contracts were entered initially, you should take partial profits on half now if you haven’t done so already. For tracking purposes, I’ll assume an exit at 101.80, a dime below where the futures are currently trading.
I’ll further suggest using an impulse leg-based stop on the 30-minute chart. This implies that a swoon now to 101.19 would take one out of the position. The stop-out price will rise to 101.45 if the current bar’s low, 101.72, becomes a point C low (where A=101.46 at 9:00 a.m. ET). _______ UPDATE (10:40 a.m. ET): A very nasty downdraft has erased most of the rally in a single bar on the 30-minute chart. Stick to the 101.19 stop for now, but use a breakeven stop if you held only one contract.
The leaps have been opportunistic, powered by short-covering whenever the mood is right. Most of the time these days, however, the futures are taking mincing steps in both directions, creating a challenging environment for profit-seekers in the middle hours of the day. One thing to notice, however, is that the rallies, particularly in this vehicle, and whether weak or powerful, seldom proceed from the first signaled entry point. Instead, the ‘money trades’ launch from a second or third point-C lows of ABCD patterns, and they do it with such repetitious reliability that one can practically discard the first signaled entry opportunities routinely. This is the kind of price action we might expect when ‘everyone’ thinks that stocks will move higher on a given day. ‘Everyone’ can be right, but that doesn’t necessarily mean they can make money easily. For your interest today, I am including a chart that shows a modest rally target at 1895.00. I’m guessing it will be easier to get short there with a tight stop than to get long for the ride to it. However, because the futures will be in record territory at that point, we shouldn’t want to impede their progress too aggressively.
Since March 20, when GDXJ was trading for around $40, I have been looking for a potentially important low at 34.00. More recently, I revised that target to exactly 33.76, a ‘Hidden Pivot support’. Yesterday it came within a single penny of nailing the exact low of a vicious swoon. The low may or may not prove to be the last gasp of a correction that has been in progress for the last five weeks, but it stood to be an opportune place to try bottom-fishing. In that regard, quite a few subscribers reported getting aboard at or near the low, and so I’ve established a tracking position for their further guidance. It consists of 200 shares with a cost basis of 33.58. The price takes into account an initial purchase of 400 shares for 33.79, then the taking of a partial profit on half the position at 34.00. The bounce so far has hit 34.90, meaning GDXJ has trampolined $1.14 cents since hitting my three-week-old target. For now, traders should stop themselves out of the position if GDXJ breaches two prior lows on the 5-minute chart without an upward correction. As of this moment, that would imply placing the stop at 34.37 (and remember: it must be exceeded by an unbroken, downtrending leg). You should also offer a round lot (or half of the remaining position, whichever is greater) to close for 36.80, good-till-canceled. _______ UPDATE (11:38 p.m. ET): The herky-jerky spasms in the first 90 minutes altered our stop-loss so that it would have taken a 34.07 print to stop us out — 23 cents beneath the actual low. I’ll now suggest raising the bar by using an impulse leg-based stop-loss on the 30-minute chart. That would imply a fall today touching 34.29. Please note, however, that the stop could change if zig-zag action early in the session creates any distinctive new lows on the intraday charts. Our target for the next profit-taking interval is still 36.80. _______ UPDATE (April 23, 1:38 p.m. ET): A powerful surge today has hit a so-far high of 36.89, allowing anyone who was long to take a partial profit at 36.80, as suggested. For tracking purposes, I’ll assume 100 shares with a profit-adjusted cost basis of 30.36. In practice, you should still be holding 25% of whatever position you acquired initially, with a 30.36 cost basis. For now, use no stop-loss.
We don’t pay much attention to this vehicle other than at key turning points, but the short-term pattern shown looks like a lay-up for traders who see futures contracts as no more than bouncing dots on a chart, waiting to be exploited. There are actually two trade possibilities here: 1) a ‘camouflage’ short as USM slips below the 132^13 midpoint; 2) and a very tightly stopped long from within a tick or two of the 131^17 target. Good luck! Please report any fills in the chat room so that I can establish a tracking position for your further guidance. ______ UPDATE (3:17 p.m. ET): The short was tricky to initiate, but once aboard, your reward came quickly with a drop to a so-far low at 131^26. As noted above, the short should be covered and reversed near 131^17. ______ UPDATE (April 6, 3:57 p.m.): The low of Friday’s violent price swings was 131^21 — not quite close enough to have gotten you long easily. Although this could prove to be an important low for the short- to intermediate term, under the circumstances I’ll assume no subscribers were filled. _______ UPDATE (April 11, 1:03 a.m.): Next important stop on the way higher: 135^17. _______ UPDATE (April 20, 11:10 p.m. ET): Last week’s fleeting stab to 135^10 came within less than a quarter-point of my target — close enough for us to consider it fulfilled. It took the futures more than a month to get there, so we should expect this correction-or-worse to last for at least a week or so before bulls attempt to push T-Bonds to new recovery highs.