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A Sane Way to Trade Crazy Markets

by Rick Ackerman on December 19, 2011 12:01 am GMT · 21 comments

Does the chart below of the Dow Industrial Average make you feel bullish? Bearish? Neutral?  We’re not sure ourselves. Although we’ve been using technical analysis for nearly 40 years, the chart doesn’t speak to us. At best, it leaves us with only a moderately bullish bias for the near term  – and a vague feeling that the meaningless price swings that have ruled the markets in 2011 could continue for longer than we would care to imagine, let alone explain  This is hard to believe, especially with so many dreadnoughts bearing down on the global economy and banking system. The U.S. is re-entering a recession that never ended for most households. China has hit the brakes in preparation for a slowdown in global trade, and the country’s real estate bubble appears to be deflating with a vengeance. Jihadists are planning naval “maneuvers” in the Strait of Hormuz. Bird flu and the bubbling Yellowstone caldera threaten us with extinction.

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TODAY'S ACTION for Monday

Sunday Night Softness

by Rick Ackerman on December 19, 2011 12:01 am GMT

Stocks and bullion were soft Sunday night in turgid action, so I’ve emphasized mildly bearish possibilities in my touts for index futures and bullion.


Rick's Picks for Monday
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ESH12 – March E-Mini S&P (Last:1206.75)

by Rick Ackerman on December 19, 2011 2:34 am GMT

March E-Mini S&P (ESH12) price chart with targetsWe are long a single contract with a cost basis of 1156.00. The 17-point drop from Friday’s high missed our 1207.75 stop-loss by two ticks, but be prepared to exit on that number Sunday night. That would give us a gain worth a little more than $2500 on paper.  ______ UPDATE (7:29 p.m. EST): The futures touched the stop moments ago, so we’ll move to the sidelines. It’s always hard to tell about these Sunday night shakedowns, but we’ll avoid this one since both ‘p’ (1206.00 ) and ‘D’ 1197.75 coincide with previous lows that are likely to entice the riff-raff into bottom-fishing.  However, if the futures get away from the dirtballs who are maneuvering them lower at this moment, they could plummet to 1179.00. That’s a Hidden Pivot you can bottom-fish either with camouflage or an 1179.25 bid, stop 1178.25.  Its ‘p’ sibling lies at 1202.00, but bidding there is suggested only for those able to employ camouflage. If an order fills there via a picture perfect ‘camo’ reversal, I’ll establish a tracking position of four contracts for your further guidance. _______ FURTHER GUIDANCE (11:12 a.m. EST): We initiated a long position at 1206.00 following a perfect ‘camo’ pattern off an overnight bottom at 1201.75. On the 10-minute chart, the abc coordinates — all single-bar! — lay, respectively, at 1201.75, 1207.75 and 1204.50.  Two contracts were to have been exited at the 1207.50 ‘p’ midpoint, and a third at d=1210.50. This gave us a profit-adjusted cost basis of 1198.50 for the contract that remained. It was exited minutes ago at 1210.75, based on the bearish impulse leg created via a dip beneath the 1211.00 ‘external’ low recorded on the way up at 4:10 a.m. Our theoretical paper profit for each four-lot entered was $600. It would seem that in a trendless market that has been serving up crap for…months, that nailing tradable intraday swings in this vehicle is as easy as shooting fish in a barrel.

SPY – S&P (Equity) (Last:121.58)

by Rick Ackerman on December 19, 2011 2:46 am GMT

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SIH12 – March Silver (Last:29.460)

by Rick Ackerman on December 19, 2011 3:16 am GMT

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The 171.10 rally target we used for this vehicle yesterday caught the intraday high precisely to-the-tick. This allowed subscribers to buy Oct 10 169 puts as suggested for a reported 0.75, the low of the day. Toward the end of the session, with DIA trading significantly lower, I suggested spreading off the risk by offering four October 10 167 puts short for 0.60.  The order went unfilled (although some tightwad put up a 0.59 bid in the closing seconds). Now, I’ll suggest offering the calls short for 0.80, a price that I might suggest raising if it looks like stocks are going to open with a big thud. If the order were to fill at 0.80, our vertical-spread position would produce a gain of at least $20 no matter what, but with upside potential to $880.

My reasoning behind this strategy is that the Ebola scare may already have reached the threshold of “tradable event.”  This I have surmised from the rapt attention the story commanded at my gym, which has TV monitors in all of the workout rooms. Whatever happens, we can only pray that there has been no spread of the disease by the man now under close watch in a Dallas hospital. However, because the possibilities that might arise from this developing story are almost too scary to imagine, we should treat it as an event that could have a significant impact on financial markets.

$JNK – High-Yield Bond ETF (Last:40.18)

by Rick Ackerman on September 29, 2014 8:30 am GMT

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$CLX14 – November Crude (Last:93.39)

by Rick Ackerman on September 25, 2014 12:37 am GMT

Energy prices got a lift Wednesday from news that U.S. air strikes had targeted a Syrian oil installation held by ISIS. The refineries that were hit reportedly have been generating revenues of $2 million a day for the terrorist group, so the news was good (even if there was no mention of jihadis left dead by the attack). Whether or not the moderate spike in oil prices will disrupt the mini-bear market in crude remains to be seen. However, using Hidden Pivot analysis, it’s possible to project a further move to the shortable 94.77 target shown. If that happens, prices will have advanced nearly 6% from their September lows. It would take just a bit more than that, however — specifically, a print at 94.93 today or tomorrow — to turn the daily chart outright bullish.

We should not expect a bearish reversal to much alleviate rising prices at the pump, however, since crude’s nearly 15% slide from late June’s highs had little effect on prices, which in many parts of the country still hover near $3.80 for a gallon of regular. Reports by the slackers, fabulists and indolent hacks who bring us the news – including, unfortunately, a reporter for The Wall Street Journal — suggested otherwise, almost to the point of saying that gasoline prices had collapsed in recent weeks. Of course, those of us who actually buy gasoline saw prices come down by only a dime or so. _______ UPDATE (September 30, 10:29 a.m. EDT): My target caught today’s 94.90 top within 13 cents, and thus the start of a so-far $1.71 plunge.  If you got short as I’d suggested, please let me know in the chat room and I’ll establish tracking guidance.

$+TLT – Lehman Bond ETF (Last:116.02)

by Rick Ackerman on September 23, 2014 2:06 am GMT

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$SLW – Silver Wheaton (Last:20.51)

by Rick Ackerman on September 22, 2014 8:23 am GMT

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$SIZ14 – December Silver (Last:17.535)

by Rick Ackerman on September 22, 2014 8:12 am GMT

The futures obliterated an 18.130 Hidden Pivot support on Friday, implying more downside to the 16.820 target shown. Because a tradable bounce from that Hidden Pivot seems likely,  I am recommending bottom-fishing there, albeit with a very tight stop-loss (or with a ‘camouflage’ bid on charts of 3-minute degree or less).  The futures have already slightly exceeded the 17.715 midpoint pivot (p1) associated with A=32.802 (1/25/13), so the new midpoint support (i.e., 16.820) is potentially a very important number. Notice that its easy breach would put an 8.776 ‘D’ target in play. ______  UPDATE (Sep 23, 9:22 p.m. EDT): A Hidden Pivot at 16.270 should also be mentioned as a downside target if the selling snowballs. It comes from a so-so, ’sausage’ pattern on the weekly chart, where A=24.865 on 8/30/13. _______ UPDATE (September 30, 3:53 p.m.):  The low of today’s selloff came within 3 cents of the 16.820 target flagged above.  For reasons noted above, this Hidden Support must not fail.

$+RGLD – Royal Gold (Last:65.34)

by Rick Ackerman on September 22, 2014 12:01 am GMT

The stock’s low on Friday occurred just 0.03 from the 65.91 target I’d projected during Thursday’s impromptu technical-analysis session. Because this looked like a great trading opportunity to me, I made it explicitly clear during the session that I was very confident RGLD would achieve the target. However, I hadn’t imagined the stock would fall so sharply — more than 4% — that it would accomplish this in a single day. I also said I was very confident that a tradable bounce would occur from the target.  It did, and the bounce so far has been 54 cents — sufficient to warrant taking a partial profit on any longs bottom-fished at the low. Although the bounce was bullishly impulsive on the very lesser charts, RGLD has come down so hard that I wouldn’t count on the support to hold for long. In any event, if you did the trade, perhaps even shorting to the target as I’d suggested, please let me know in the chat room so that I can provide tracking guidance for the position that remains. ______ UPDATE (Sep 22, 8:23 p.m.): Sellers crushed the support after it held for just a day, implying more weakness is coming. If so, we should expect a test of support near the 58.86 low recorded  in late May. _______ UPDATE (Sep 24, 7:27 p.m.): A weak rally has lifted RGLD off recent lows, but the move would need to hit 66.49 to turn the very lesser charts impulsively bullish. The nearest Hidden Pivot resistance of importance lies at 66.22, so take encouragement if there’s an easy move through it.

$SNIPF – Snipp Interactive (Last:0.3400)

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. _______ UPDATE (Sep 22, 8:30 p.m.): The stock has continued to rally, and the closest Hidden Pivot target is now 0.2668.  If that Hidden Pivot is exceeded on a closing basis for two days, however, a target at 0.3474 would be in play. _______ UPDATE (Sep 23):  Snipp has entered the Brazilian market via an exclusive marketing contract with Petrobas. Click here for the news release. ______ UPDATE (Sep 23, 1:57 p.m. EDT):  The stock has gone bonkers today, up six cents to within less than a penny of the 0.3474 target projected two days ago.

$+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.


This Just In... for Monday

Our good friends at Auerbach & Grayson are out with a storm warning for stocks and other risky assets in the first quarter.  The dollar, on the other hand, is in a strong primary bull trend that should see significantly higher valuations in the months ahead, according to Richard Ross, A&G’s global technical strategist.  Click here for the full 27-page report.


Hidden Pivot Webinar & Tutorials
The Hidden Pivot Webinar is one-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 October 16, 2014. For more information, or to register, click here.