July 31st, 2014
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TODAY'S ACTION for Tuesday

Child Molesters Don’t Move Markets

by Rick Ackerman on February 7, 2012 9:35 am GMT

Price action early Tuesday morning was so tired that it looked almost incapable of generating any heat unless sparked by some sensational piece of news overnight.  Unfortunately for traders, as of around 2:40 a.m. EST, the child-molesting teachers at an L.A. school were holding the top spot above-the-fold.


Rick's Picks for Tuesday
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ESH12 – March E-Mini S&P (Last:1344.50)

by Rick Ackerman on February 7, 2012 8:03 am GMT

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DXY – NYBOT Dollar Index (Last:79.19;)

by Rick Ackerman on February 7, 2012 8:35 am GMT

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GCJ12 – April Gold (Last:1750.50)

by Rick Ackerman on February 7, 2012 8:48 am GMT

April Gold (GCJ12) price chart with targetsGold’s downtrend stalled yesterday between two minor, bearish Hidden Pivots, but not before the June contract had taken out three more external lows. This is discouraging action for the near term, and it suggests the 1702.00 target given here earlier remains a good place to look for a tradable low. Alternatively, we can set the bar at 1747.50 (see inset) today to signal a meaningful resurgence of bulls. ______ UPDATE (2:33 p.m. EST):  The April contract has rallied nearly $40 from this morning’s fake-out low, creating a bullish impulse leg on the hourly chart. Now, assuming 1752.60 holds as ‘B’ of the current impulse leg, Gold will need to pull back by at least $12.50 (0.625 of $20 k-A segment) to be considered fully re-charged for a C-D follow-through  leg of as much as $40.

SIH12 – March Silver (Last:33.730)

by Rick Ackerman on February 7, 2012 9:30 am GMT

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Lower targets given here yesterday remain viable, but a new one at 1285.50 has come into focus as a result of yesterday’s headless-chicken histrionics.  Night owls can try to grab a piece of the downside by shorting near the 1296.40 midpoint pivot with a tight stop. But if you miss the trade there will be an opportunity  to bottom-fish via a 1285.60 bid and the tightest stop-loss you can handle.  _______ UPDATE (8:48 a.m. EDT): This one worked pretty nicely, since the futures swooned to a 1285.90 low just 15 minutes ago, then bounced to a so-far recovery high at 1291.20.  As of 9:40, there were no reports in the chat room of anyone having used the target to get long, although one sub evidently was short profitaly overnight.

$ESU14 – Sep E-Mini S&P (Last:1969.25)

by Rick Ackerman on July 30, 2014 12:40 am GMT

Slippage beneath the red line (p) late in Tuesday’s session implies the futures will now grope their way down to at least 1954.50 in search of traction.  This target is a pretty one, and I’d have no qualms about telling you to bottom-fish there with a three-tick stop-loss if it were hit intraday. However, because the target is being disseminated overnight and therefore will not be as fresh and mysterious when the futures get there, I’ll advise a cautious approach that suits your style if you plan to bottom-fish. As always, the most logical short would be from p if the retracement rally now in progress gets there.  Trading concerns aside, if the downtrend smashes the support it would indicate that the selling is waxing. _______ UPDATE (2:18 p.m.): Today’s hysterical, obligatory short-squeeze has come from 1956.50, cheating us out of an easy trade from the target I’d identified.  There’ll be other opportunities, for sure.  However, because the turn has come from a low that didn’t quite reach a clear correction target, bears had better give the rally wide berth.

$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.)


This Just In... for Tuesday

Lurkers sometimes come into this forum to take potshots at my forecasts, evidently unaware that the techncial analysis they might find in my commentaries is often less precise, timely and finely nuanced than that which paying subscribers receive every day. One such lurker was ‘Steve,’ who culled an $18.355 target for March Silver from a list of “Predictions for 2012″ I’d published early in the New Year. Steve questioned how this very bearish forecast could differ so dramatically from a $30.35 target featured shortly thereafter in the Touts section and in this forum. Because Steve himself blogs professionally (I gather) on the subject of Silver, one might infer that he had an ulterior motive for bashing my forecast.  Whatever the case, I have reprinted his comments and my response below so that lurkers can better understand what they are missing by not paying for the good stuff that subscribers receive daily.  (Click here to access the original discussion, or to add to it.)

Steve’s post:

Rick, I had a few questions. I recently wrote [an article] where I discuss that the majority of analysis on the Internet is contradictory and frustrating. I have been following your articles for some time.

I remember you DEC 30, 2011 TEN PREDICTIONS for 2012. Here was one of them:

Gold will stage a powerful rally after bottoming at $1445 in January, but the buying spree will fall well short of $2000. Silver will fare relatively worse, falling to $18.35 before finding traction and recovering into the low $30s.
——————————————————–
A little more than a month ago you were predicting $18.35 silver in JAN. Today, in your most recent article, you are now seeing “AN EASY MOVE TO $35.53″.

What I would like to know is this. How on earth can you have that much of a change in price in one month? It reminds me of what CLIVE MAUND forecasted back on JAN 8, when he said silver would go down to $18 in his charts.

Listen, I am not trying to be negative here, I just want to know how does JOE BAG OF DONUTS make any sense of the market when you make such an EXTREME difference in your price forecast within a month?

And my response:

It was brazen of you to come into my forum to launch this presumptuous, self-serving attack. But to those who have actually followed my forecasts closely over the years, you have only made an ass of yourself. While you were licking your chops over the prospect of taking me to task over an 18.355 Silver target that you lifted out of context from my here-goes-nothing ‘Predictions for 2012,’ below are the actual, verbatim forecasts that went out to my subscribers.

Have a chart handy, and pay close attention to the Hidden Pivot numbers (updated in real time, 24/7, by the way) as my subscribers most surely do, since these pivots are the fine details on which they would have based their trading decisions while you were gloating over my 18.355 ‘error’.

Taken together, the sequence of predictions below supports my assertion that if my forecasts are going to be wrong, it will not be by much or for long. I have boldfaced a portion of the silver ‘Tout’ published on December 29 because it could not have foreseen more accurately or in more timely fashion the major, bullish reversal that was to occur that very day. For in fact, the futures trampolined powerfully from a low that lay just four cents beneath the 26.185 support flagged in my analysis. They never looked back — and neither did I. As the record clearly shows, I gave my subscribers a bullish heads-up within an inch of the December 29 bottom. Thereafter, all of my highly detailed trading “Touts” were from the long side — albeit cautiously at first for reasons that I make explicitly clear.

December 29:

Yesterday’s selloff made short work of an ostensibly solid Hidden Pivot midpoint support at 27.018 pivot, lending authority to its 18.355 sibling. A 50% fall from here is not yet a done deal, although the futures are almost certain, at the very least, to breach late September’s 26.185 low before they find traction. It could prove fleeting, but I would expect a bounce of at least $4 over a period of 3-5 days if bulls are to be given a fighting chance. Keep in mind that the bounce would be occurring with relatively few profit-takers aboard, since most bulls will have gotten shaken loose by the feint beneath 26.185. If this rally were to fail to generate a bullish impulse leg on the daily chart (a feat that would require an unbroken sprint from 29.135 to 33.305), then we should prepare for the worst.

January 3:

Like gold, silver has begun the New Year with an unimpressive rally — up 25 cents at the moment. The thrust would need to tack on an additional 63 cents to turn the hourly chart bullish, since that’s what it would take to breach an ‘external’ peak at 28.790 recorded last Wednesday on the way down.

January 4:

Unlike February Gold, this vehicle is within easy distance of negating a target 40 cents below the recent bottom at 26.145. However, a much lower target at 18.355 is still in play, and we also need to take into account that the rally so far is not especially impressive considering that it was catalyzed by a viciously false breakdown beneath September’s neon low, 26.185. On balance, we can trade the minor rallies but use tight stops. Just such an opportunity could unfold Tuesday night or Wednesday based on the pattern shown. The implied entry risk would be $1500 per contract on the 120-min chart (25% of A-B x $50/1 cent), so you’ll need to zoom down to a chart (end entry pattern) of lesser degree when the big-pattern ‘X’ is about to trigger. _______ UPDATE (3:11 a.m. EST): A pattern very similar to the one I sketched triggered a 29.410 ‘X’ entry signal at around 2:10 a.m., but executing the trade on the 1-minute chart would have produced an unacceptably large loss of 2.5 cents per contract, or $125. Entry would have come off the pattern A=29.400 (2:47 a.m.); B=29.465 (2:48 a.m.), C=29.435 and X=29.455. A lower, second point ‘C’ at 29.420 (2:53 a.m.) yielded a solid winner that would still be live, but strictly speaking, ‘camo’ trades should work on the first try or we don’t do them. The next valid entry opportunity — and winning trade — would have come at X=29.495 (3:00 a.m.), but I’ll let you discover the details so that you can learn from them. (Swimming with the sharks in the wee hours needn’t be scary. If you’re a night owl looking to make the most of the excellent opportunities that frequently occur when most traders are asleep, click here.)

January 5:

Unlike gold, silver’s thrusts have been unambiguously impulsive on the lesser charts, suggesting it will lead the way (as well it should, since silver has a lot more lost ground to make up from 2011). We can use the 30.120 Hidden Pivot shown in the chart as a minimum upside target for now, predicated on a decisive push above it ‘p’ sibling at 29.520. That resistance was exceeded yesterday by 2.5 cents, tipping my bias for Thursday bullish. Night owls should notice that, at press time, the futures were working on a bullish ‘camo’ pattern projecting to 29.600. On the 15-minute chart, A=29.120 at 8:30 p.m. EST, and B=29.440.

January 6:

I identified a Hidden Pivot at 30.120 here yesterday as a minimum upside objective, but yesterday’s price action lends more weight to another pair of pivots — they lie, respectively, at 29.755 and 30.825 — that will probably play a larger role over the next few days. The provenance of both is shown in the chart, and it will undoubtedly take some diligent attention to the 15-minute chart to exploit the anticipated move without risking much.

January 9:

March Silver spent the week backing and filling following the 14% rally that has kicked off the New Year. Remaining patient is our only option at the moment, but we can still use the 30.215 ‘external’ peak shown in the chart to tell us when mere noise is starting to sound more like the fearsome snort of a resurgent bull. Camo traders should stick with micro-risk plays on the 5-minute chart, since this vehicle has been creating new point ‘C’ lows as though every silver trade out there is all too eager to buy. (Want to learn how we use Hidden Pivots and “camouflage” to reduce entry risk to relatively small change? Click here.)

January 10:

Yesterday’s peak at 29.205 created a bullish impulse leg on the hourly chart — and a bit of camouflage as well. The pattern is shown in the accompanying chart, with a buy signal at 28.875 that would have implied far too much entry risk — $900 in theory — for us to have used bars of hourly degree. (Pop quiz for camouflageurs: Can you find a better, cheaper way in on the five-minute chart?) Because the 29.000 midpoint pivot has been exceeded to the upside, we should infer that the pattern will complete to its ‘D’ target at 29.250. If not, bulls are more enfeebled at the moment than we might otherwise have suspected.

January 11:

Silver would have to rally a further $5.50, exceeding 35.680, to negate the scary targets below $20 broached here earlier, but the $4 rally so far is an encouraging start. It projects to at least 31.030, but if that Hidden Pivot fails to slow buyers down, we’d be looking at a possible rampage to as high as 32.145. To assess buyers’ resolve, we should pay close attention to the ‘external’ peak at 31.070 that was recorded in mid-December in the throes of a steep fall. If buyers pay it little heed, that would be the most heartening technical sign we’ve had since October, when the futures embarked on a 12% rally that ultimately failed.

January 12:

The 31.030 rally target given here yesterday continues to serve as a minimum objective for the near term, but a close above it would augur more upside over the near term to as high as 32.145. The effort so far this week has created a bullish impulse leg on the daily chart by surpassing an ‘internal’ peak at 29.740 recorded last Wednesday and an external at 30.210 from December 21, implying that any pullback that doesn’t breach 29.210 to the downside would be setting up another rally leg. More immediately, night owls can use the pattern shown to try to get long. The entry signal has already been tripped at 29.930 on the ‘15′, so you’ll need to drill down to the ‘5′ to get aboard belatedly.

January 13:

March Silver went impulsively bullish on the lesser charts late Thursday night, but this was after it achieved a ‘D’ target on a pullback. That suggests bulls will struggle on Friday and that any trades from the long side be done via a ‘camouflage’ entry that poses no more than $70 of theoretical risk per contract. At exactly 1 a.m. EST, the three-minute chart showed an ‘camo’ pattern with a potential entry trigger at 29.985. The coordinates are as follows: A=29.875, B=30.010, C=29.950 (Note: That last number is very tentative). This set-up may be gone in five minutes, but I have presented it nonetheless so that you’ll have an idea of what to look for if you want to get aboard tonight using charts of least-most degree.


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