September 1st, 2014
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The Dollar Index has blasted through key resistance at 80, threatening to “unwind” carry-traders who borrowed dollars for next to nothing in order to speculate on other assets. Chief among those assets is gold, which got savaged yesterday in a $100 selloff that seems hell-bent on testing September’s key low. The low lies at 1543, basis the Comex February contract, but we doubt that it will hold. In fact, earlier, we had told subscribers there was a 60% chance that February Gold was about to dive to at least 1459, a technical target derived from our proprietary Hidden Pivot Method.  We shall see. In any event, gold and silver –  as well as crude oil, the euro and the commodities complex– will come under heavy selling pressure if the short-squeeze picks up steam. If you’d like access our specific price targets for all of these trading vehicles in the days ahead, click here for a free trial to Rick’s Picks. » Read the full article


TODAY'S ACTION for Thursday

Rooting for a Rally!

by Rick Ackerman on December 15, 2011 3:21 am GMT

We locked in some bear spreads in the QQQ yesterday at great prices. That leaves us in the unaccustomed position of rooting for a rally so that we can complete a bull spread in SPY. We took the first leg of that position on Tuesday at so-so-prices, but we may be able to reduce our risk to zero if stocks take a strong bounce from here.


Rick's Picks for Thursday
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QQQQ – Nasdaq ETF (Last:54.88)

by Rick Ackerman on December 15, 2011 3:17 am GMT

Near yesterday’s lows, we locked in some bearish puts spreads that carry almost no theoretical risk but which coud produce substantial gains if stocks stay weak into 2012. Specifically, we now hold two January 54-51 puts spreads for a debit of 0.07 and two January 53-50 puts spreads for a debit of 0.03.  Both positions together cost us a total of $20, but they could produce a maximum profit of $1200 if things go our way. Effectively, we have gotten 60-to-1 odds on the QQQs trading 50 or lower by January 20. We’ll do nothing further for now, but I’ll send out an alert if a sharp downdraft in the broad averages should make it advantageous to cash out before expiration. Regarding the Cubes, yesterday’s plunge exceeded a 54.87 midpoint support by a decisive 29 cents, implying that weakness will continue down to at least 52.13, its ‘D’ sibling.  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:1218.25)

by Rick Ackerman on December 15, 2011 3:33 am GMT

March E-Mini S&P (ESH12) price chart with targetsWe doted on the 1198.00 target during yesterday’s tutorial session, licking our chops at the prospect of getting in at a trampoline bottom. Alas, fatigued sellers were unable to push this pup any lower than 1202.50.  The downside target is still valid, as is another less promising one at 1199.75, but bottom-fishing is recommended only for those who are camouflage-equipped. If you’re not but desperate to do something, anything, you can try bidding 1195.25 with a 1.00-point stop-loss.  That’s the lowest target I can extrapolate from the 15-minute chart (see inset). _______ UPDATE (9:17 a.m. EST): I’m establishing a tracking position, since the 1198.00 target nailed the exact low of this so-far 20-point rally. Also, a couple of chat-roomers who work the graveyard shift evidently initiated positions at the low. Assuming four contracts purchased, cash out half of them here for around 1218.00.  That will give us an effective cost basis of 1178.00 for the two contracts that remain. Tie them to a 1205.75 stop-loss for now, o-c-o with an order to sell one contract at 1226.00. Hitting the low to the exact tick was a simple parlor trick that you can learn in a month. Click here if you think you’re ready to try.

GCG12 – February Gold (Last:1578.20)

by Rick Ackerman on December 15, 2011 3:45 am GMT

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SIH12 – March Silver (Last:29.070)

by Rick Ackerman on December 15, 2011 6:34 am GMT

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$GCZ14 – December Gold (Last:1289.20)

by Rick Ackerman on August 29, 2014 3:57 am GMT

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$ESU14 – Sep E-Mini S&P (Last:1990.00)

by Rick Ackerman on August 29, 2014 3:35 am GMT

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$CLV14 – October Crude (Last:93.76)

by Rick Ackerman on August 28, 2014 1:13 am GMT

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$PCLN – Priceline (Last:1260.77)

by Rick Ackerman on August 28, 2014 1:00 am GMT

If the lunatic stocks are about to lead the broad averages higher, we should see Priceline bounce sharply from the 1259.21 midpoint support shown. Yesterday’s low came within 38 cents of this Hidden Pivot — close enough for the target to be considered fulfilled. Any further slippage, however, and its ‘D’ sibling at 1224.45 will be in play. This would imply that the stock market itself is likely to go nowhere, or possibly down, in the days ahead.  The stock would become shortable on a decisive breach of the red line (i.e., a breach of perhaps 0.30-0.60 cents0, but if you plan on getting short for the potential $35 ride south, you should initiate the trade on the 5-minute chart or less, using a corrective pattern that would subject you to no more risk theoretically than perhaps 0.15 per share. If the trade works and you are still short when 1224.45 is reached or closely approached, reverse the position and buy at the target aggressively using a tight stop.

$+TSLA – Tesla Motors (Last:264.09)

by Rick Ackerman on August 26, 2014 7:35 am GMT

Tesla’s bullish rampage looks like it could hit 305.55 on the next big thrust.  Accordingly, I’ll recommend bidding 1.54 for the October 3/Sep 5  300 calendar spread 8 times, good till Friday. You should adjust your bid by 0.05 up or down for every 50 cents the stock moves above or below 262.50.  Please note as well that a pullback to the red line, a Hidden Pivot midpoint at 241.39, should be regarded as a buying opportunity, especially the calendar spread (albeit it at a much lower price). _______ UPDATE (August 26, 11:43 p.m. EDT):  Volatility has gotten crushed, and so you’re doing well if you buy the spread now for 1.34 (with TSLA at 262.00).  Since the spread price can fluctuate wildly from one day to the next, I’ll suggest that you recalibrate it hourly if you’re a buyer, using a spread price midway between bid and offer as “fair value.”  It has a delta value of around 9 at the moment, so you should adjust your bid for the spread by 0.01 for each 0.11 move in the underlying. _______ UPDATE (August 28, 9:45 p.m.):  With the Sep 5 calls melting away, the fair price for our spread must be recalculated several times daily by anyone seeking to buy it. It was a decent buy at Thursday’s close for around 1.20, but it could shed yet another 0.15-0.25 as the week ends.

$SLW – Silver Wheaton (Last:24.89)

by Rick Ackerman on August 25, 2014 12:05 am GMT

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$AAPL – Apple Computer (Last:100.89)

by Rick Ackerman on August 21, 2014 3:16 am GMT

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$+TLT – Lehman Bond ETF (Last:117.72)

by Rick Ackerman on August 20, 2014 4:59 am GMT

Subscribers are working two bullish calendar spreads (x16), but I would suggest increasing the size of the position if TLT corrects down to the 115.18 target  shown.   For now , we are long September 20 118 calls against short August 19 118 calls that we will roll into August 29 calls this Thursday and Friday.  We’ve already done the roll twice, reducing the cost basis of the spread to 0.04. This week’s roll will entail covering (buying back) the short calls and shorting a like number of August 29 calls, effectively selling the August 22 118/August 29 118 calendar spread.

It was marked on Tuesday at 0.17, off a 0.26 offer, but any price higher than 0.04 will effectively turn the position we’ll have  – long the Sept 20 118/August 29 118 calendar — into a credit spread.  This means we can’t lose – will make a profit no matter what TLT does.  Ideally, come September 20 , TLT will be sitting at 118, our spread will be trading for around 0.50, and we’ll be carrying it for a credit of perhaps 0.50.  The imputed profit would be  $1600 — not bad, considering our risk is already close to zero.

My long-term outlook for T-Bonds is very bullish, a view that goes sharply against a consensus which clings to the belief that interest rates – and the stock market — can only go up.  That is a bet we should be eager to fade. We may have a chance to do so at still better odds if T-Bonds continue to  sell off  on the manufactured idea that the Jackson Hole conference will open the floodgates for more stimulus and inflation. _______ UPDATE (10:38 a.m.):  The Sep 20/Aug xx calendar spread is recommended at this point only for those who did the original spread, since there’s not enough time left on it to roll its cost basis down to zero or less (i.e., a credit). If you are new to the spread, try buying the Nov 20/August 29 calendar for 0.90 with TLT trading around 115.80.  The spread has a delta value of 0.20, implying that being long one spread is equivalent to being long 20 shares of stock.  This means that, using a spread price of 0.90 as a benchmark, you should adjust the price you pay for it by one penny, up or down, for each 5 cents that TLT moves away from 115.80. ______ UPDATE (August 23): The strategies detailed above continue to rack up solid gains for subscribers that have come with minimal risk. If you have yet to take a stake, I would strongly urge you to do so, and to monitor reports in the chat room from those who are working the order. If there are any questions about how, and when, to initiate a trade, please don’t hesitate to ask me or others about it. _______ UPDATE (August 26, 12:01 a.m.): These spreads are working well, to put it mildly — especially for subscribers who increased their position size as suggested whenever TLT was weak.  Check my August 26 posts in the chatroom for further, detailed guidance.  In brief, I am suggesting covering half of the 118-strike spreads for 0.90 or better this week, and to roll the short side of the Nov 22 120/Aug 29 120 to Sep 5. _______ UPDATE (August 28, 12:43 p.m.): The August 29 118 calls look likely to finish in-the-money. To avoid being exercised, make sure you roll into the September 5 calls before noon EDT Friday.  Currently, with TLT trading 119.09, the September 5 118/August 29 118 calendar spread is a decent sale for around 0.28.  Keep in mind that the spread could widen, to our great advantage, if TLT pulls back, since the August 29 calls we are short will shed value more precipitously than the September calls that we continue to hold as the long side of our position. Even so, you could do worse than take the 0.28 now and run, since it would simply fatten the premium we have taken in on the weekly short, increasing our net credit.  With TLT rallying liking a moofoo, the weekly credits will be more significant to our final gain than the calendar spread itself at expiration.


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