September 18th, 2014
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[The commentary below elicited quite a response, so I'm letting it run for a second day. Wednesday's commentary will feature two very important trading tips for permabears who have been trying for years without success to short the elusive Mother of All Tops. If you're interested in learning the "parlor trick" that we used on Friday to get short the QQQs ourselves within a hair of the intraday high, click here. And if you'd like to have these daily commentaries delivered to your e-mail box free of charge, as will as free access for a week to all of Rick's Picks services and feratures,  click here. RA]

Who’d have believed that the word “hypothecation” would grab the financial world’s shakers and movers by the balls last week, whirl them round-and-round, then dash their cynical pretenses of “saving” Europe against a stone wall?  Click here to read the article on this topic at ZeroHedge if you haven’t done so already. And then send it to everyone you know. We did, with a warning that the collapse of the banking system is no longer merely possible or likely, but unavoidable. The article takes pains to explain why in terms that even the layman can understand. It will undoubtedly have created quite a stir not only among the broad readership of web sites that linked it, but among those charged with the task of further delaying Europe’s financial collapse. The spinmeisters and policymakers have been doing their utmost to obscure the details of the supposed rescue effort, since the better those efforts are understood, the more absurd they become. » Read the full article


TODAY'S ACTION for Tuesday

Dollar Looks Poised to Surge

by Rick Ackerman on December 13, 2011 5:30 am GMT

The Dollar Index looks set to pop above 80, an event that would have dramatic implications for the dollar carry-trade. I will write at greater length about this later in the week, but for now you should check out the DXY tout and the chart that accompanies it, since it shows how all hell might be about to break loose in the form of a runaway dollar.


Rick's Picks for Tuesday
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ESH12 – March E-Mini S&P (Last:1236.50)

by Rick Ackerman on December 13, 2011 4:35 am GMT

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QQQQ – Nasdaq ETF (Last:56.52)

by Rick Ackerman on December 13, 2011 4:58 am GMT

Nasdaq ETF (QQQQ) price chart with targetsWe hold two Jan 54 puts and two Jan 53 puts whose cost basis has been profit-adjusted downward to, respectively, 0.76 and 0.57. I’ve suggested shorting December 54 and 53 monthly puts against them for the same price, yielding risk-free calendar spreads, and that’s what we will do officially. We may try something else if the selloff begun yesterday stalls, though, since it will take a pretty nasty downdraft to get our short offer filled.

However, you might also consider emulating a chat-roomer who reported legging into $2 vertical bear spreads by shorting January 52 puts against the January 54 puts he already held. Because he did so for a net credit, the position will make money regardless of whether the QQQs rise or fall. However, it will also give him a risk-free bear play into the New Year, with a $200 profit assured if the Cubes fall below 52 by January expiration.  For now, my minimum downside target is the 54.87 midpoint of the pattern shown.  You can leverage this number as you see fit, but my hunch is that it will foster a tradable bounce from within no more than four ticks of 54.87.

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.

GCG12 – February Gold (Last:1658.80)

by Rick Ackerman on December 13, 2011 5:13 am GMT

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SIH12 – March Silver (Last:31.100)

by Rick Ackerman on December 13, 2011 5:16 am GMT

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DXY – NYBOT Dollar Index (Last:79.52)

by Rick Ackerman on December 13, 2011 5:26 am GMT

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$ESZ14 – Dec E-Mini S&P (Last:1994.75)

by Rick Ackerman on September 18, 2014 6:40 am GMT

A subscriber noted in the chat room yesterday that Hidden Pivot targets have been working very precisely in numerous vehicles: “For what it’s worth,” he wrote, “the Hidden Pivot Method has recently become accurate to-the-penny in GDXJ, JDST and JNUG. Prior to this month, like Crude Oil futures, these vehicles needed some leeway. No longer. They are absolutely brilliant vehicles at the moment.”  My response was that this is exactly what we should expect when stocks are trending strongly up or down, as opposed to just meandering.

One thing’s for sure: On the lesser charts, tradable price action can be quite predictable even in such ornery vehicles as the E-Mini S&Ps. Yesterday, for instance, with the futures thrashing their way higher on news that the Fed, as always, was planning to do nothing, I posted a 2003.50 target as my minimum rally objective as the E-Minis were hitting a then-intraday high of 2000.00. Although they dove to 1994.00 immediately after my post, they subsequently rallied to exactly 2003.25, recording an intraday high just one tick from the forecasted top; then they relapsed nearly 12 points to finish the day. The trade could have been worth almost  $600 per contract to anyone who got short at the top.

As it happened, one subscriber did get short — then took spectators ringside as he announced his follow-through in real time. At 3:12 p.m., with the futures trading 2002.50, he posted the following: “Scalp-trade order parked to short ESZ at 2003.“  Then, the rest of the story:  3:15: “c’mon boyz, u can get there”; 3:17: “done at 03″; 3:18: “04.25 hard stop; switched to 1.5 trailer“; 3:22: “$2600 in 5 mins…not bad“; 3:32: “covered 1/2 at 98.5″; 3:36: “Wow, they may take this red!“; 3:40: “-10 s&p points in 12 mins…awesome!”

Awesome indeed. We invite you to join us  in the chat room to see whether you could do these trades yourself.  For a free trial subscription that comes with a seat at ringside during market hours, click here.  A follow-up note: It’s 12:35 a.m. and the futures have been trading in a remarkable, three-tick range for seven hours. Presumably, they are gathering strength for a short-squeeze to the nearest Hidden Pivot resistance above, 2007.50. An easy move through it would suggest yet more strength percolating beneath the surface.  Keep in mind, however, that a VERY major rally target that has been 27 years in coming lies at 2028, basis the cash S&P Index.

$YHOO – Yahoo! (Last:42.71)

by Rick Ackerman on September 17, 2014 5:28 am GMT

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$SIZ14 – December Silver (Last:18.655)

by Rick Ackerman on September 16, 2014 1:25 am GMT

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$SLW – Silver Wheaton (Last:22.49)

by Rick Ackerman on September 15, 2014 6:06 am GMT

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$GCZ14 – December Gold (Last:1223.60)

by Rick Ackerman on September 15, 2014 5:50 am GMT

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$DJIA – Dow Industrial Average (Last:17025)

by Rick Ackerman on September 12, 2014 12:01 am GMT

When a stock or an index takes a wicked dive, it often occurs after the particular vehicle has marginally exceeded some prior, significant peak. ‘Everyone’ turns bullish on the breakout, including bears prepared to cover on a hair-trigger signal, and that sets up the haymaker. Notice in the accompanying chart, however, that the record high recorded by the Dow on September 4 has led to no such plunge.  The high exceeded July’s record peak by 10 points, and that should have been enough to get bulls’ — and bears’ — juices flowing.  Instead, we’ve seen only a moderate pullback since then, leaving bears very much on the hook.  We could still see a collapse from these levels, particularly if there is unsettling news. But for the time being, bears shouldn’t get their hopes too high. We are short the Diamonds via some out-of-the-money put options just in case, but we may have to reshort if DIA breaks out to new highs. (Note: This tout is being written before Thursday’s close, since I will be away from the office later today.)

$TLT – Lehman Bond ETF (Last:113.11)

by Rick Ackerman on September 11, 2014 1:29 am GMT

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$+DIA – Dow Industrials ETF (Last:171.64)

by Rick Ackerman on September 5, 2014 3:58 am GMT

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$SNIPF – Snipp Interactive (Last:0.2562)

by Rick Ackerman on September 5, 2014 3:05 am GMT

I first touted Snipp Interactive back in January, when it was trading around 0.15. Although the stock subsequently fell to a dime, it has since rallied sharply, settling at 0.2562 yesterday. This is one of my favorite stocks, and I came away from a conference call with its CEO, Atul Sabharwal, eager to sing their praises. During that call, I hit Atul with my best idea, a sweepstakes-type promotion, but he was already three steps ahead of me, able to cite, for one, New York State’s rules and costs for exactly the type of marketing scheme I’d suggested.

Full disclosure: I hold 100,000 shares plus warrants to purchase another 50,000 shares.  But I hope that won’t discourage you from performing your own due diligence, since you are likely to be as impressed as I was when you find out what the company has been up to. For me, at least, Snipp (OTC: SNIPF) perfectly satisfies Peter Lynch’s rule that investors favor companies whose strengths and methods they can understand. Snipp does interactive marketing that allows clients to track results in real time. The results have been sufficiently impressive that the company has been attracting blue chip clients with little difficulty. Read more about SNIPP by clicking here.

From a technical standpoint, although the stock’s chart history is thin, it’s possible to project a near-term rally target of 0.2730. A tenet of Hidden Pivot analysis is that an easy move through such targeted resistance implies there is unspent buying power percolating beneath the surface. This is not a “hot tip;” indeed, Snipp’s story does not lend itself to the kind of hubris that will result in a $10 billion IPO. But it is an aggressive and imaginative pioneer in a rapidly developing niche, and its CEO has the kind of imagination, intelligence and energy that inspires confidence.

$+TSLA – Tesla Motors (Last:279.20)

by Rick Ackerman on September 3, 2014 5:30 am GMT

Tesla’s strong rally has turned the Oct 3/Sep 5 calendar spread into a solid winner. The spread is currently trading on a bid/asked of 4.50/5.07.  This means subscribers who bought the spread for as little as $1.00 last week could have quintupled their stake. The most paid for it would have been about 1.54. In any case, I’ll suggest offering half of the eight spreads to close today for 4.70. We’ll plan on rolling what’s left on Friday by covering (buying) back the September 5 300 calls we’re short and shorting the Sep 12 300 calls at the same time. ______ UPDATE (10:40 p.m. EDT): The stock’s push to an intraday high at 291.42 made the spread an easy sale for $5.00+, so I’ll consider the order filled.  Now, roll the four spreads that remain into the October 3 /September 12 calendar as detailed above. _______ UPDATE (Sep 7, 10:31 p.m.): The midway price on the spread intraday was 2.30. Imputing the premium to the four October 3/September 12 calendar spreads we now hold would zero out the initial cost of 1.54 and add 0.76 to the real-time value of the spread.  We’ll plan on rolling the spread again on Friday by selling the September 19/September 12 call spread (and thereby covering the short Sep 12 300s), but for now do nothing further. _______ UPDATE (Sep 15, 12:54 a.m.): I’ll use a 0.37 price, midway between the intraday high and low, as the spread price unless I hear from someone in the chat room who did better or worse. Imputing this new premium income to our Nov 22 / Sep 20 spread gives us a CREDIT cost basis of 1.13, for a guaranteed minimum profit on the position of $452. That would be in addition to whatever the Nov 22 calls fetch when we exit them.

+GDXJ – Junior Gold Miner ETF (Last:37.51)

by Rick Ackerman on September 2, 2014 12:03 am GMT

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