August 1st, 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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$GCZ14 – December Gold (Last:1283.60)

by Rick Ackerman on August 1, 2014 2:30 am GMT

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$ESU14 – Sep E-Mini S&P (Last:1927.50)

by Rick Ackerman on August 1, 2014 1:42 am GMT

Yesterday was the first time in recent memory that many of those who ‘bought the dip’ got creamed.  Traders should keep in mind that every bearish target implies a potentially profitable short with-the-trend as well as a bottom-fishing opportunity at the target.  In a bear market, the best place to initate the short will often be on the retracement rally to the midpoint pivot rather than at the conventional point ‘x’ of the downtrend.  This will hold true for the longer time frames as well.  Assuming we’ve entered a bear market, corrective rallies will tend to fail at their midpoint pivots, and ABCD downtrends to reach or exceed their ‘D’ targets.  My experience with the dot-com boom-and-crash is that heightened volatility makes swing highs and lows even more predictable than wafting rallies or sideways chop.

Concerning this vehicle, most immediately, the night shift has pushed the futures to the exact midpoint resistance (p) of  the minor abc uptrend shown. If  p holds, this would be as expected. As I’ve implied above, bear markets tend to produce corrective rallies that get no further than p. Night owls may not get much movement in off-hours trading, but the moves themselves will be more predictable and reliable than what you’re used to.

$NFLX – Netflix (Last:431.51)

by Rick Ackerman on July 28, 2014 4:32 am GMT

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As GDXJ was working its way south from around $43, my bearish forecast called for a washout low at exactly 40.42, a Hidden Pivot support of great clarity. I’d suggested buying down there ‘aggressively’ and with an ‘absurdly’ tight stop-loss.  This advice would have paid off handsomely for anyone who followed it, since the stock trampolined 64 cents yesterday off an actual low of 40.43, a penny from my target. Since a subscriber reported doing the trade as advised, I’m establishing a tracking position for the further guidance of all who may have gotten long. (He reported having bought 1000 shares off a 40.44 bid, but I’ll assume a more conservative 400 shares.)  Accordingly, I’ll recommend exiting half the position on Friday’s opening if you haven’t done so already.  We’ll impute any profits thereof to the cost basis of the 200 shares that will remain. _______ UPDATE (July 27, 9:48 p.m. ET): Exiting 200 shares on Friday’s 41.20 opening leaves us with a tracking position of 200 shares whose imputed cost basis is 39.66.  Exit another 100 shares on today’s opening and tie the rest to an impulse leg-based stop-loss on the 15-minute chart.  At the moment, that would imply bailing out on an uncorrected dive touching 41.73. ______ UPDATE (July 28, 11:46 a.m.):  We got sleazed when DaBoyz opened the stock on the so-far low  of the day, 42.40.  The good news is that such shakedowns usually occur because the smart money is trying to buy the stock.  In any event, I am tracking a 100-share position with an effective cost basis of 37.25.  For the time being, let it run. _______ UPDATE July 29, 7:23 p.m. EDT): Let’s turn the position into a covered write if GDXJ slips beneath 42.25 today (see inset, a new chart).  Specifically, you should short one August 16th 41 call for each hundred shares you own. Don’t simply bang out a sale on the bid when the stock hits 42.24, since you could get clipped for as much as 0.20-0.25 on the spread that way.  Instead, you should be deliberate and relaxed about the short sale of the call, since we are in the catbird’s seat and have little to lose by taking in some option premium at this point.  Shoot for a price midway between the bid and offer, and don’t rule out the possibility that GDXJ could snap back above 42.25 even in the process of breaking down. _______ UPDATE (July 30, 2:32 p.m.): _______ UPDATE (2:30 p.m. EDT):  I’ve yet to hear from anyone, but a ‘relaxed’ short could have been done anywhere between 2.03 and a current bid/offer of 2.45/2.90.  I’ll use a cost basis 2.55, about midway between, unless I hear otherwise.

$+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 unable to buy the spread keep trying.  We’ll shoot for a partial profit if the stock rallies $40-$50 in the next few weeks but otherwise do 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.  To that end, a pop above the 1270.59 midpoint pivot would be most encouraging. ______ UPDATE (July 28, 7:46 p.m. EDT): Yesterday another subscriber reported legging into ‘free’ butterfly spreads as suggested. Keep trying for at least one more day if you haven’t yet acquired a stake, since the spread will remain cheap as long as PCLN doesn’t blast off.

$+TLT – Lehman Bond ETF (Last:115.40)

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

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$EURUSD – Euro/USD (Last:1.33950)

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. _______ UPDATE (July 24, 5:35 p.m. EDT):  Yesterday’s short-squeeze feint topped precisely at a midpoint Hidden Pivot (see inset, a new chart) that was originally support but which is now resistance. This price action confirms the pattern we’ve chosen as well as its ‘D’ target at 1.34197. At least one subscriber has confirmed getting short in the chat room.  _______ UPDATE (July 27, 10:43 p.m.):  Friday’s low occurred at 1.34206 — 0.00009 above our 1.34197 target.  Shorts should have covered there, but if you were able to bottom-fish the low and catch a piece of the 144-tick rally that ensued, please let me know in the chat room and so that I can establish a tracking position for your further guidance. _______ UPDATE (July 30, 2:43 p.m.): The futures have breached the lowest of the targets I’d provide from the lesser charts. This implies that a bigger-picture target at 1.32091 is in play. The chart(see inset, a new one) shows this.

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The Dollar Index turned higher yesterday an inch from a correction target that had been three weeks in coming (see inset). This portends a bullish change for the intermediate term.  The actual target is 79.74, and there is always a chance it will be breached. If so, there’s an alternative target at 79.62, but if it fails as well, especially without a fight, the implication would be more slippage to as low as  78.91, where a key low recorded in early May would thereupon beg to be tested. _______ UPDATE (11:17 p.m. EDT): Yesterday’s low occurred at 79.74 exactly. If the dollar is about to reverse and move higher, it will have to happen here, and now. _______ UPDATE (July 9, 2:33 a.m. ET): The dollar rallied strongly for a few days, but it is still not out of the woods because the move narrowly failed to clear an important ‘external’ peak at 80.38 recorded on 6/26. _______ UPDATE (July 16, 6:55 p.m.): DXY came within an inch of a clear and important Hidden Pivot rally target at 80.60 yesterday (see inset, a new chart). However, it will have to push past it to imply that the rally from the July 1 low (which had been predicted to-the-penny) is more than just a flash-in-the-pan. _______ UPDATE (July 30, 2:53 p.m.): 81.85, here we come!! (See inset, a new chart.)


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