July 24th, 2014
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Video: Goldman, MF Global and the Euro Mess

by Ricks Picks on December 12, 2011 4:47 am GMT · 1 comment

Yesterday, Rick appeared on The Keiser Report. Rick and Max discussed Goldman’s death dive and MF Global’s crimes against the markets. Rick’s segment begins 12 minutes and 55 seconds into the video.


TODAY'S ACTION for Monday

Gold and Silver were getting pounded in the middle of the night, although index futures were down only enough to suggest that Da Dirtballs were shaking out sellers.  Their by-now-familiar trick is to make certain that the contracts they’ve stolen from widows and pensioners in the wee hours can be short-squeezed higher with almost no resistance before the opening bell.  The (small) gamble is that sunrise will not bring word of Europe’s demise.


Rick's Picks for Monday
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QQQQ – Nasdaq ETF (Last:56.18)

by Rick Ackerman on December 12, 2011 8:46 am GMT

With the E-Mini S&P hitting our rally target in the final moments of Friday’s session, we bought four QQQ Jan 54 puts or Jan 53 puts, respectively, for 0.96 or 0.74. These are keepers, since just about anything could happen between now and January 20 when the options expire. Do nothing further for now.  _______ UPDATE (11:02 a.m.EST):  In the chat room a moment ago, I suggested cashing out half of the puts at current prices: 1.16 for the Jan 54s, 0.91 for the Jan 53s.  That leaves us with two puts at either strike and a profit adjusted cost basis for each, respectively, of 0.76 and 0.57. Let’s spread off the risk by turning the positions in calendar spreads, shorting a December put for each Jan 54 put or Jan 53 put you currently hold. Do so in a 1:1 ratio, and shoot for putting on the spread for “even” or better.  What this means is that you will short the puts for the cost basis of the puts you now hold, selling December 53 puts for 0.57 (currently trading for around 0.09) and December 54 puts for 0.76 (currently trading for around 0.18).

Although the course of action suggested above may seem very conservative, it is essential that we nail down partial profits on option positions when possible, particularly on puts that have “come in.”  In the several decades that exchange-listed puts have been offered, instances in which put holders enjoyed more than three consecutive pleasurable days have been non-existent. I would dare say that at least 95 percent of all puts ever purchased “naked” have lost money for the trader.

Click here if you’d like to learn more about the Hidden Pivot Method, including how to identify and trade targets such as the ones used above, and to forecast trends with bold confidence.

ESH12 – March E-Mini S&P (Last:1250.25.)

by Rick Ackerman on December 12, 2011 9:10 am GMT

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GCG12 – February Gold (Last:1670.40)

by Rick Ackerman on December 12, 2011 9:28 am GMT

February Gold (GCG12) price chart with targetsThe bad guys had gold on the run Sunday night, presumably bound for the 1672.30 downside target of the pattern shown.  It would take nothing less than a pop to 1733.00 overnight or Monday to put bulls back on the offensive. The bearish target can be bottom-fished — preferably with camouflage, but if you want to take the easy (but somewhat riskier) path, because the pattern has such gnarly appeal, you can bid 1672.40 with a 0.50-point stop-loss. Nimble traders can also look for a turn at 1685.70, the midpoint support of the lesser pattern shown with purple ABC coordinates.  Keep in mind that ‘camo’ shorts would be aligned with some even larger downtrends that point to either 1638.00 or 1633.10_______ UPDATE (11:43 a.m. EST):  Bottom-fishing at 1672.30 could have produced a small profit, but probably no worse than a scratch when the futures subsequently headed lower. There was a 12-minute bounce of $3.40 from 1672.60 at 8:42 a.m. (3-min); and a $3.80 bounce from 1672.00 that lasted just a few minutes. Since we were using an initial stop-loss of 50 cents, the bounce we’d anticipated need only have been $1.50 to give us a reason to take a partial profit on half the position.

SIH12 – March Silver (Last:31.540)

by Rick Ackerman on December 12, 2011 9:52 am GMT

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$+PCLN – Priceline (Last:1238.98)

by Rick Ackerman on July 24, 2014 12:54 am GMT

A subscriber reported success yesterday legging into the 1340/50/60 August 16 call butterfly that I’d advised. He did so 32 times at no cost, as suggested, but it took a $10 move in the stock between legs to get filled so advantageously. His maximum profit would be $32,000  with the stock trading at 1350 come August 16.  Since he owns the position without cost, no loss is possible, even if PCLN should all to zero or rally to $1000. We’ll do nothing further for now, but I’d suggest that those of you who were unsuccessful keep trying.  We’ll shoot for a partial profit if the stock rallies $40-$50 in the next few weeks, but otherwise we’ll doing nothing further. I’ve reproduced a chart that shows why our expectation of a $120 rally from current levels, to a 1358.18 Hidden Pivot target, is not exactly farfetched.  Toward that end, a pop above the 1270.59 midpoint pivot would be most encouraging.

$+ESU14 – Sep E-Mini S&P (Last:1981.00)

by Rick Ackerman on July 24, 2014 12:29 am GMT

I’m tracking a single contract short from 1982.50, based on the following post by me in the chat room at 1:45 p.m. EDT: “Aw, screw it. Just for the hell of it, let’s offer a single contract short at 1982.50, stop 1985.25, risking a theoretical $137.50 plus commissions. I’d hate myself if we actually missed a great short up here.”  Actually, it looked like we had missed the short, since I’d suggested initiating it at a longstanding Hidden Pivot target at 1984.25 that was missed by three ticks when this vehicle topped for the day at 1983.50 in the first hour.

The futures subsequently crept back up to 1982.75 later in the session, and it was then that I advised getting short for the hell of it. We remained short at the bell, but anyone who did the trade is advised to monitor it overnight, and to use the 1985.25 stop-loss suggested. That implies that were are risking a theoretical 2.75 points to stay in the trade.  If we use the fixed risk:reward of 1:3 that I always advise, we need a move our way of at least 8.25 points, to 1974.25, before we implement a trailing stop. (Had we initiated the trade with multiple contracts, we would take a partial profit there on half the position.)  I may suggest an impulse leg-based stop-loss if ESU falls straightaway to 1974.25, so stay tuned to the chat room if you’re unclear on how to do this. It is my intention to come out of this trade with at least a small profit even if ESU blows higher, as is likely. That will be possible if we get the pullback to 1974.25, since a 1981.25 stop-loss would become automatic at that point, subject to the substitution of a trailing stop. Meanwhile, I’ve reproduced an hourly chart (see inset) that shows the sinewy perfection of the pattern we’ve used to get short just beneath its 1984.25 Hidden Pivot.

$TLT – Lehman Bond ETF (Last:115.18)

by Rick Ackerman on July 23, 2014 5:36 am GMT

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$EURUSD – Euro/USD (Last:1.34647)

by Rick Ackerman on July 23, 2014 12:01 am GMT

I haven’t tracked currencies that closely, but because they tend to move very precisely to Hidden Pivot targets, traders should consider exploiting them whenever possible. Notice how EUR/USD has broken beneath a midpoint Hidden Pivot at 1.34841 after noodling around near that pivot for a few hours on Thursday. This suggests that it is bound for D=1.34197, at least.  You can bottom-fish there with a stop-loss as tight as 3-4 ticks.  Notice as well that there are two slightly higher possibilities for point ‘A’.  The correction targets they yield lie, respectively, at 1.34114 and, worst case, 1.33992.  I expect these numbers to work very precisely, so use them in whatever way suits you best.  Note as well that a last-gasp rally to p=1.34738 after EUR/USD has fallen a bit would be short-able.

$GCQ14 – August Gold (Last:1311.60)

by Rick Ackerman on July 22, 2014 1:29 am GMT

The futures looked like they could go either way as Monday’s session drew to a close. However, the stall within 0.70 of the 1318.30 midpoint resistance I’d flagged implies that a decisive move past it would reach its D-target sibling at 1331.60. Alternatively, my worst-case target for the near term would be the 1278.20 Hidden Pivot support in the lower-right quadrant of the chart — or possibly even 1271.70 if any lower.  The accuracy of this target would be affirmed by a bounce, possibly tradable, from within two or three ticks of the 1302.00 midpoint support. ________ UPDATE (9:57 a.m. EDT):  Gold has bounced $14 this morning from a low just two ticks (0.20) from the 1302.00 midpoint pivot flagged above. Now, if the futures breach the support, we’ll know EXACTLY where they are headed. _______ UPDATE (July 23, 12:01 a.m.): Someone in the chat room said that because everyone seems to be bearish on gold right now, perhaps we should take the other side of the bet.  I’m a bit bearish myself, and thus this response: “Rather than take chances and let gold disappoint us for the zillionth time, we should simply stipulate that the August contract close above 1318.90 before we get excited. That’s the midpoint resistance, on the 180-minute chart, of a=1292.60 on 7/15; b= 1325.90 on 7/27; and c=13-02.20 on 7/22. At that point, I’d lay even odds of a move to at least 1335.50; above 1337.00, the futures would be a good bet to hit 1381.40.  Whatever happens, bulls will have to prove their case. _______ UPDATE (July 24, 1:20 a.m.):  Sellers paused for a relatively blissful nine hours yesterday just inches above the 1302.00 ‘hidden’ support I’d flagged, presumably to sniff the flowers before going back on the attack.

$SLW – Silver Wheaton (Last:26.43)

by Rick Ackerman on July 17, 2014 12:05 am GMT

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$NFLX – Netflix (Last:452.00)

by Rick Ackerman on July 9, 2014 3:25 am GMT

Netflix’s so-far $37 selloff has followed a peak last week at 475.87 that slightly overshot a Hidden Pivot at 474.50 I’d characterized as ‘a big-picture target where an important top is even more likely.’ A chat-roomer who evidently took this prediction to heart reported buying puts last Thursday for 1.24 that he cashed out for 8.90 yesterday. This could be just the start of NFLX’s comeuppance for all those who inflated this gas-bag to undeserved heights. If you took a position and are still holding it, please let me know in the chat room and I will update guidance. For now, though, let me suggest that you take profits on half of any short position entered near the recent top. _______ UPDATE (July 10, 10:23 p.m.): Bears failed to achieve a Hidden Pivot target yesterday, presumably because DaBoyz shook the stock down so hard on the opening bar that it exhausted sellers prematurely. The missed target suggests that traders will enjoy decent odds bottom-fishing the midpoint pivot shown at 433.62 (see inset, a new chart) with a stop-loss as tight as 8 cents. If it’s hit, expect the selling to continue down to at least 423.05, a Hidden Pivot that can be bottom-fished with as tight a stop-loss as you can abide. _______ UPDATE (July 14, 11:07 p.m. EDT): A turn from 428.20, precisely between the two pivots flagged above, left our bid high and  dry.  The bull leg that has followed could be the start of a rally cycle with the potential to reach 486.86. First, though, let’s see whether buyers can tackle a midpoint pivot at 457.53 that is associated with the target. _______ UPDATE (July 16 at 6:47 p.m.): Let’s not overlook the downside — specifically, the 433.69 midpoint pivot and its D sibling at 411.67.  Bears can short the break for a move to either, and both can be bottom-fished with the tight stop-loss you can abide. ______ UPDATE (July 22, 12:15 a.m.): The stock turned higher from $2 above the midpoint support, implying that bulls are about to dominate once again.  Call prices are on the moon, however — way too expensive for a straight directional bet. Instead, I’ll suggest buying the August 2 – July 25 calendar spread eight times for 1.50, day order, contingent on the stock trading 451.00 or higher. Please report any fills in the chat room. _______ UPDATE (July 22, 12:05 p.m.):  With today’s huge air pocket, the stock obviously remains in the grip of DaBoyz. My assumption will always be that steep declines in NFLX are brazen shakeouts, engineered by strong hands to steal stock at fire-sale prices from weak hands. In this instance, the downdraft appears likely to hit 413.00 before DaBoyz run it up again. If and when that number is hit, you can bottom-fish there with the tightest stop-loss imaginable. (Note: I’ve revised the target downward by 0.96 since the original update. Also 435.25 is the midpoint pivot and therefore worth a tightly stopped short on a rally to it.)


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The Hidden Pivot Webinar is two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. The next Webinar will take place on August 13-14, 2014. For more information, or to register, click here.