August 29th, 2014
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[I'm running this commentary for a second day because of the high-minded discussion it has elicited.  Please be aware that an announcement next week concerning the latest bailout for Greece would probably generate a short-squeeze rally on Wall Street, much as it has a dozen times before.  Be that as it may, a potentially important target at 1353.00 that I'd flagged here for the E-Mini S&Ps has held thus far, the futures having spiked in the opening hour yesterday to...1352.75.  In other trading notes, a rally target for Bank of America shares was bullishly exceeded, although two more important ones remain: 13085 for the Dow -- a longstanding objective of ours;  and 119.91 for Goldman Sachs. Taken together, the prospect of simultaneous tops in so many bellwethers suggests that an important trend change could be imminent.  Click here for a free trial subscription to Rick's Picks if you'd like to keep abreast of further developments in real time. RA]

The financial world is on pins and needles as “investors” await Europe’s latest, quasi-momentous decision on the fate of Greece. The Greeks themselves, no fools, were a step ahead of the politicians and bankers, rioting in the streets.  Many of them have probably imbibed enough austerity to last a lifetime. Keep tightening one’s belt a notch at a time and eventually you’re left with two bloody torso halves. Not that the bankers would mind the mess as long as they get paid. So what, actually is at stake in this latest chapter of the eurobailoutpalooza? The rescue package under discussion amounts to a piddling €130 billion, and we can’t see how it’s going to make much of a difference. Even if it’s only intended to buy a little time, a sum as meager as that may not see the Eurocrisis through the weekend, much less through 2012.  For perspective, Flint, Michigan’s unfunded retirement and health benefits total about three times as much. Is Flint in worse shape than Greece? Hard to say, although the close proximity of such charming resorts as Corfu and Rhodos, as opposed to beautiful downtown Detroit, would seem to tip the quality-of-life numbers in favor of the Greeks, even the down-and-out day-trippers. » Read the full article


TODAY'S ACTION for Monday

Sunday Night Shenanigans

by Rick Ackerman on February 13, 2012 2:13 am GMT

The euro’s chart looks more bullish than the U.S. dollar’s at the moment, suggesting that the latest deal to keep Greece afloat has passed muster with the global banking establishment.  Index futures are up as well, but only by enough — six points — to imply DaBoyz are more interested in distributing stocks than buying them tonight. See you in the morning!


Rick's Picks for Monday
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ESH12 – March E-Mini S&P (Last:1347.25)

by Rick Ackerman on February 13, 2012 6:44 am GMT

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GCJ12 – April Gold (Last:1730.70)

by Rick Ackerman on February 13, 2012 7:00 am GMT

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ECH12 – March Euro (Last:1.3251)

by Rick Ackerman on February 13, 2012 7:49 am GMT

March Euro (ECH12) price chart with targetsThe euro’s daily chart looks more bullish than the dollar’s at the moment, implying that Greece’s latest resuscitation will pass muster where it matters most — i.e., in the make-believe world of global finance. Even so, the futures can’t afford to stall for more than a few days lest they lose the considerable momentum that will be needed to surmount the 1.3296 ‘external’ peak recorded on December 8.  That’s what it will take to refresh the bullish impulsiveness of the daily chart and to sustain the illusion that Europe is somehow muddling through its debt crisis. Click here for details concerning the upcoming Hidden Pivot Webinar, where you can learn to do this stuff yourself.

SLW – Silver Wheaton (Last:35.88)

by Rick Ackerman on February 13, 2012 8:13 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.


This Just In... for Monday

Bullish Look at HUI Gold Bugs Index

by Rick Ackerman on February 13, 2012 12:14 am GMT

This impromptu session from Thursday morning runs a little more than an hour, touching on B of A, the E-mini S&Ps and Comex gold. But of greatest interest, perhaps, in the final 15 minutes, is a detailed (and bullish) look at the HUI Gold Bugs Index. My suggestion is to fast-forward to this segment (unless you’re interested in the real-time ‘camo’ portion related to other vehicles).


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