July 29th, 2014
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Americans can take comfort in the likelihood that the showdown between mortgage lenders and homeowners will not resemble Greece’s battle-to-the-death with its creditors. In the U.S., the banks are slowly losing ground to a populist, election-year tide that eventually will force lenders to accept a moratorium on mortgage debt for tens of millions of homeowners. In the rapidly escalating legal battle to bring this about, last week’s $25 billion settlement between the banks and the U.S. did not settle much of anything, since the banks in theory can still be sued into oblivion by aggrieved homeowners. The plaintiffs will be claiming in effect and with a straight face that they got in over their heads because lenders forced them to borrow more than they could repay. Who would have imagined just a decade ago that an army of reckless borrowers would seek the protection of the courts under the remorseless deadbeat’s battle flag “Kick me, beat me, make me write bad checks”?  That’s what it’s come down to, evidently, and woe to any bank that asks the court for help in turning a family out onto the street. The five big banks that signed onto the deal are undoubtedly running scared, since the legal latitude afforded those who could conceivably claim “questionable lending practices” has been widened to include just about anyone who lives in a home – including, presumably, tens of millions more homeowners who  are not yet underwater but eventually will be. Keep in mind that the costs of the yet-to-be-unveiled Homeowner Bailout Act of 2014 have already been socialized, since the GSEs have been originating 90% of all new mortgage loans. » Read the full article


TODAY'S ACTION for Tuesday

No Doubting Greece’s Sincerity

by Rick Ackerman on February 14, 2012 2:50 am GMT

With Athens streets engulfed in flames, there is no doubting the sincerity of Greece’s austerity pledge. Nor can we underestimate how dire the country’s financial crisis will become if the bailout money does not arrive soon.  We know this is so because even socialists in Greece’s parliament are supporting the deal with Europe’s bankers.  Try a free trial to Rick’s Picks by clicking here.


Rick's Picks for Tuesday
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ESH12 – March E-Mini S&P (Last:1346.00)

by Rick Ackerman on February 14, 2012 2:04 am GMT

March E-Mini S&P (ESH12) price chart with targetsCome tomorrow, the 1353.00 pivot will have held for a week, hinting that the short-covering that has been driving stocks from one plateau to the next is not of the rampaging variety; rather, it is of the quietly psychotic variety, premeditating each new leap on the basis of whatever the latest, fabricated GDP/payroll numbers and “good” news from Europe will allow. Absent any truly horrifying geopolitical news — and I’m not sure that even that would restrain buyers — we should expect the futures to break out shortly and head for the 1362.50 Hidden Pivot noted here earlier.  Traders can test the water near that price with a tightly managed short, but camouflage is advised because of the rally pattern’s less-than-stellar pedigree.  Want to learn how to nail price reversals like a pro?  You can learn to do it in as little as six weeks. Click here for information about the upcoming Hidden Pivot Webinar and receive a $50 discount.

CLH12 – March Crude (Last:100.62)

by Rick Ackerman on February 14, 2012 2:18 am GMT

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HUI – Gold Bugs Index (Last:521.51)

by Rick Ackerman on February 14, 2012 2:30 am GMT

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GCJ12 – April Gold (Last:1723.50)

by Rick Ackerman on February 14, 2012 2:43 am GMT

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Bears found themselves trapped on the opening yesterday for the umpteenth time since the bull market began, setting up a short-covering panic that turned what began as natural weakness in the broad averages into steroid-powered strength.  DaBoyz simply pulled their bids at the bell, allowing the relative smattering of market orders that had built up over the weekend to have an inordinate effect. Into a bid-less vacuum, stocks dove the equivalent of 120 Dow points, exhausting pent-up orders in about 45 minutes. Once sellers were spent, it was child’s play for the smart money to effortlessly squeeze the futures back up to where they had begun the day — plus a little. Moreover, since there was but a shallow correction from the end-of-day highs, bears remained tactically on the ropes at the close.

For our part, since subscribers could have gotten short from as high as 1984.25 based on a Hidden Pivot rally target disseminated last week, some may have elected to swing for the fences by staying short. However, although the trade could have produced a profit of as much as $1200 per contact, the possibility that we were getting the jump on the Mother of All Tops was never more than remote. If you still hold a position, please let me know in the chat room and I will furnish further guidance.  Strictly speaking, a short would have survived yesterday’s nasty dipsy doodle if it had been tied to an impulse leg-based stop-loss on the hourly chart.

$NFLX – Netflix (Last:421.86)

by Rick Ackerman on July 28, 2014 4:32 am GMT

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$GCQ14 – August Gold (Last:1303.80)

by Rick Ackerman on July 28, 2014 4:06 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.

$+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:1.34302)

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.

September E-Mini Nasdaq (Last:3965.00

by Rick Ackerman on July 15, 2014 4:21 am GMT

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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.


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