Wednesday, February 29, 2012

Around 1 a.m. EST, the April contract, bound presumably for 1801.40, was bullishly impulsive on the 15-minute chart, manifesting the ABC coordinates shown. Assuming the so-far point 'C' at 1787.40 survives, the 'X' entry trigger would come at 1789.10, with implied theoretical risk initially of $180 per contract.  Since that's more than twice our acceptable limit for 'camouflage' trades in Gold, we'll need to find an X entry point on a chart of even lesser degree.  My recommendation is to look for it in the form of an uptrending ABC pattern on the one-minute chart if it looks as though the trade will trigger on the '15'.  If you want to dispense with camouflage by initiating the trade at 1789.10, stop 1787.30 (i.e., a tick below C), use a timed buy-stop, allowing perhaps 30-60 seconds for the position to go in-the-black. If it does, be diligent about taking a partial profit at the 1790.70 midpoint, since the futures may be too timid tonight to leap above two mildly daunting highs at 1792.00 and 1792.70 (Tuesday's peak). _______ UPDATE (3:00 a.m. EST): The futures made it exactly to the 1790.70 midpoint before dropping back to 1787.60, two ticks from 'C'. If the 1787.30 stop survives the night, I'll establish a two-contract tracking position for your further guidance. Profits taken so far at p on half the position would insulate the rest of it from loss down to 1786.40, but any lower would imply a $20 loss per tick on two contracts. _______ FURTHER  UPDATE (10:22 a.m. EST): Price action in this vehicle has turned so vicious that we'll keep our distance for the time being. The overnight trade was stopped out for pocket change when the futures did a $17 dipsy-doodle. A subsequent lull set up an $18 power dive this

Yesterday's action in April Gold was most encouraging, since the vicious pullback engineered late in the session by DaSleazeballs reversed from almost the exact midpoint pivot of a larger, bullish pattern projecting to 1801.40.  Pay close heed to today's Silver tout, however, since the May contract is nearing a potentially important rally target.

Silver looks beautiful, having leveraged the consolidation pattern noted here yesterday to launch a mini moon-shot. Beware of a possible stall at 37.760, however, since that is the clear Hidden Pivot target of the pattern shown. There's no telling how bulls will handle this resistance point, but the reaction could be brutal.  If, on the other hand, they simply blow past it, $40+  should not be long in coming.

DIA is closing on a 130.88 target that closely corresponds to the one we are using for the cash Dow. Let's  plan on shorting there by legging into a put spread, buy-side first. This should not be treated as a bet-the-farm play, but rather as an opportunity to make back the cost of your subscription -- and perhaps the cost of the Hidden Pivot Course. Accordingly, we'll use a stop-loss for the puts, albeit a generous one. Keep in mind that if this vehicle overshoots 130.88 by more than a couple of points, it would be telegraphing further upside to the 133.36 'D' target of a much larger pattern begun in August 2010 from 99.11. Regarding our trade, I'll recommend buying four April 128 puts with the underlying trading within 0.15 points of the target. I estimate the puts will be trading for around 2.07 then, but you should follow the bid/asked when the target is approached to get the best possible price. Since we aren't betting the ranch, mainly because the point 'B' here is a bit sausage-y, stop yourself out of the position if the puts trade for 25 cents less than you paid for them.  The theroretical risk on this trade would therefore be around $100. ________ UPDATE (March 2, 12:45 a.m. EST):  The 130.21 target of a lesser pattern raises the odds that the tradable top we were looking for has already occurred. Accordingly, I'll be looking for entry an opportunity to initiate the short intraday.  We may not be able to get the best price that would have been available, but my goal in any event will be to choose a safe entry point that will put us quickly in-the-black.  Any trade that is executed will be signaled via an e-mail alert, an update to

The 1396.25 rally target in the chart is somewhat more bullish than the 13085 target I've drum-rolled for the Dow (once again in today's commentary), but it looks too clean and compelling to ignore -- especially with yesterday's touchy-feelly return to the exact p midpoint of the rally pattern. A camouflage boarding pass will be hard to come by in a bull move so advanced, but Pivoteers should note that there is at least potential 'camo' cover in the two-tick gap between external peaks at 1373.25 (60-minute chart, 2/28 at 8 a.m. EST) and 1373.75.  A stall at the higher number could yield the B-C pullback we'd need to jump on at X for the final thrust to 1396.25.

Stocks are creeping into the red zone, according to our proprietary technical indicators. A possible end to the Mother of All Bear Rallies begun three years ago? Perhaps. But rather than guess about such things, we’ll let the charts tell us what we need to know.  We don’t have a crystal ball, after all, but we’ve learned that the stock market cannot change directions in any significant way without telegraphing the turn on the lesser, intraday charts. This they did back in January, when a pullback to a key ‘hidden” support signaled the big rally that was to follow. Specifically, using Hidden Pivot Analysis, we were able to tell subscribers to expect a Dow rally of at least 600 points, to a minimum 13085. At the time, we were bearish as all hell on the real world.  However, and as all traders come to understand, the stock market is unconnected to the events of the real world. Under the circumstances, trying to predict its ups and downs on the basis of the  headlines is futile.  Nonetheless, bearish as all hell, fearful of war in the Middle East and ever mindful of the economy’s fitful descent into Depression, we wrote the following in a Rick’s Picks “trading tout” disseminated to subscribers on January 18: “Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown [see above]. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to