Wednesday, February 8, 2012

April Gold did not adequately correct the hourly chart to set up an instant push above last Friday's 1765.90 peak, but the 30-minute bars will at least get the futures to the 1760.20 'D' target of the lesser pattern shown (see inset).  If it gives way easily, bulls should have little trouble taking out the higher peak soon thereafter.  (Click here to learn more about the Hidden Pivot Method we used to forecast and trade futures and stocks.)

We'll use the 119.91 target to get short, whack-a-mole style, if Goldman should poke its ugly little head up.  This is slightly lower than the Hidden pivot target given here earlier, but the pattern shown amply supports the new number. I'll specifically recommend that you buy two March 110 puts (or multiple thereof) with GS trading within a few cents of the target. Stop yourself out if the puts trade for 20 cents less than you paid for them. ________ UPDATE (February 22): We'll put this one aside for now, since the stock's struggle to reach the target has become too tedious to command our earnest attention.

The 8.08 rally target shown look sufficiently compelling to warrant the purchase of puts when the stock gets there.  Camouflageurs can short the shares naked, risking no more than 6 cents per round lot, but for those who prefer the ease and leverage of options, I'll recommend buying two March 9 puts (or multiple thereof) with the stock trading within 3 cents of the target. I'll further recommend that you stop yourself out if the puts trade 15 cents below their purchase price, since it's always possible B of A will fail to heed the Hidden Pivot resistance.  If we do the trade, our goal will be to eventually short puts of a lower strike for the same amount we've paid for the 9s. That would give us some vertical bear spreads with no possibility of a loss. _______ UPDATE (9:58 a.m. EST):  The  stock has gotten no higher this morning than 7.98, but if it hits the 8.08 target today, expect to pay about 1.12 for the puts. _______ FURTHER UPDATE (10:34 a.m. EST):  The stock popped to 8.09, pushing the puts as low as 1.06. Officially, I'll record a purchase of two for 1.10.  For now, if they trade down to 0.95, stop yourself out of the position.

I've asked veteran camouflageurs who frequent the chat room to guide less-experienced traders if an exceptional opportunity to short the E-Mini S&P should occur when I'm not around.  If our entry trigger gets hit while I'm conducting the weekly tutorial session online between 11 a.m. and noon EST, I'll make sure the information is disseminated in the chat room at that time.

I've alluded to a key target in today's commentary, and although merely talking about it has made it one of those high-profile numbers that are probably jinxed from the start, the Hidden Pivot itself is real enough and should provide sufficient stopping power to allow us to get short without risking too much. Putting aside the promotional hubris of today's commentary, which the public can access, subscribers should be aware that if the futures reach the 1353.00 target, they'll be in new recovery territory, trading above April's important 1344.50 peak. That implies that they will have created a fresh bullish impulse leg on the daily chart, an eventuality that will shorten the odds of our hitting a four-bagger on a bear trade. Still, our goal will be to get aboard without stress, and to simply go with the trade as far as it will take us.  My hunch is that the 1353.00 pivot will be hit overnight Tuesday or Wednesday morning, so I'm depending on the legion of experienced camouflageurs who frequent the chat room to guide rookies if things pan out as we might wish them to. _____ UPDATE (February 9, 11:22 a.m. EST): The futures spiked to 1352.75 about 50 minutes before the opening bell.  Some subscribers evidently got short, and said so in the chat room. However, strictly speaking, it was not possible to do so via camouflage until about 90 minutes later, so I won't record the trade officially.  Unofficially, though, and for your further guidance, with the futures currently trading around 1346.00, I'd suggest covering three-quarters of the original position for a profit, tying the remaining 25% of it to a stop-loss at 1349.75.  This is not a trade on which we should be swinging for the fences, since the markets are waiting opportunistically for

The stock market hasn’t been much fun to trade in a while, but that could change today as the broad averages approach some potentially important rally targets of ours. Want to know exactly where these targets lie but don’t subscribe?  Click here for a free trial subscription that will give you access to our proprietary numbers. One of them foresaw a 600-point rally in the Dow that is nearly complete. The other is a bullish target for the E-Mini S&Ps that smacked us in the eye yesterday with its clarity.  There are also two bank stocks whose deft handlers appear to be setting up suckers for the kill. These financial biggies are household names, but because they are in the thick of Europe’s bailout hoax, they are destined to go down with the ship. Under the circumstances, the hysterical, short-squeeze rallies that have driven their shares steeply higher may be ready to seven-out. We’ve been itching for months to find a good place to short this market. As many of you who trade will already know, except for a delightful, breath-of-spring plunge in late October/early November, it’s been a tiresome, uphill slog for patient bears. Now, although we can’t guarantee that the Hidden Pivot targets about to be hit are going to stop the bull dead in its tracks, we’re optimistic that they will provide an exceptional opportunity to get short. There are umpteen ways to do this, but we’ll probably concentrate on index futures and put options on certain equity trading vehicles. If you’re not familiar with the “camouflage” technique we use to help alleviate the stress of initiating a trade, you may be surprised at how easy it is. 'Unmained' This won’t be the first time we’ve laid out shorts in a market that was steaming relentlessly higher.

Romance your sweetie on Valentine's Day with the songs of  Sinatra.  One of my oldest friends, Rick Apt, runs the best Old Blue Eyes memorabilia-and-music site on the web. For an earful -- and some terrific February 14th specials -- click here.