Thursday, April 5, 2012

GDX – Gold Miners ETF (Last:46.14)

– Posted in: Current Touts Rick's Picks

Harry's prediction more than  a month ago -- reiterated and amplified in the chat room on Wednesday --  of a tradable low at 46.15  was a near-bullseye, so I'm establishing a tracking position of 400 shares for your further guidance. For now use a 46.18 stop-loss. Please note that there is potential downside to 44.87 if GDX breaks down. _____ UPDATE (2:49 p.m. EDT):  That was quick. We exited on the stop a short while ago. Someone in the chat room asked whether the tight stop might have been a typo.  It wasn't. My intention was to deny GDX the opportunity to play me -- and anyway,"rules is rules."  By now, we should have learned that any trade we do in any vehicle even remotely tied to mining shares should not be based on faith, hope, trust, 'fundamentals', or, heaven forbid, optimism, but on purely mechanical indicators -- with a dollop of cynicism, and another of skepticism, thrown in for good measure.

QQQQ – Nasdaq ETF (Last:66.38)

– Posted in: Current Touts Free Rick's Picks

We hold a tracking position of two May 68 puts with a profit-adjusted cost basis of 1.34. For now, stop yourself out if the underlying vehicle trades above 68.29. You should also offer  single contract to close for 2.30. _______ UPDATE (12:25 p.m. EDT): With the market getting pounded for a second straight day, we sold the put option for 2.30. That effectively gives us one free put for each four-lot position acquired initially. It is my intention that this position be held until it pays for your subscription, but for now do nothing further. ______ UPDATE (May 1):  Like perhaps 99.999% of all unhedged puts purchased out-of-the-money by retail customers, these too will prove to have been a longshot bet. Even so, we will have held a risk-free play for more than six weeks on the unlikely demise of the Mother of All Bear Rallies.  Taking the blows easily in stride and surviving to fight again is what it's all about for us permabears, no? Continue to hold the position, since we are still likely to make a few bucks on it -- even with the broad averages surging to new recovery highs.  _______ UPDATE (May 4, 2:52 p.m. EDT): We hold a single May 68 put in the QQQs (or 25% of the original position, based on some multiple of four contracts purchased initially).   Since profits on this trade were earmarked to pay the cost of an annual subscription to Rick's Picks, I'll recommend closing out the single-contract position with a good-till-canceled offer of 3.50 for the put.  If you still hold more than a single put, hang on to at least half the position for a potential home run.

SIK12 – May Silver (Last:31.445)

– Posted in: Current Touts Rick's Picks

I see downside risk over the near term to as low as 29.940. To come up with this target and a compelling pattern, I took as its point 'B' the first low to breach last January's 31.600 bottom. That is the second most important 'external' low on the chart, after mid-February's 32.715, and that's why I consider 31.090 worthy of anchoring this bearish picture as its point 'B'.  All of this is more easily imbibed visually, so I'll suggest taking in the accompanying chart in a glance.  Most immediately, if further selling awaits, it should be telegraphed via corrective rallies that do not reach their 'd' targets.

GDXJ – Junior Gold Miner ETF (Last:22.53)

– Posted in: Current Touts Free Rick's Picks

Although I'd originally suggested backing up the truck at 22.74, I'll track 400 shares from 22.80 because I was slow yesterday in retrieving the trade, which had been shelved in the archive. I'll also record four August 23.63 calls @ 1.85, since I advised their purchase not only in the chat room but in a bulletin before the options fell to their intraday low at 1.75. Let's offer two of them for 2.25 today, day order, o-c-o (i.e., completion of one order will cancel the other) with a stop-loss on all four at 1.70. (Note, the options must trade for 1.70 before you hit the 1.70 bid.)   As for the stock, if it recedes into the same vortex that is threatening to pull GDX and HUI lower, it would likely mean a final low at 19.66, a Hidden Pivot 'D' shown in the chart. Accordingly, I'll recommend using an impulsive stop-loss on the three-minute chart.  This implies stopping yourself out on any downtrending A-B leg that exceeds two prior lows (one of them internal or better, the other external) without an intervening upward B-C correction.  To see this illustrated graphically, click on the thumbnail inset at right. _______ UPDATE (11:49 a.m. EDT):  We exited the stock on a 22.67 stop for a nominal trading loss of $52, but the option position remains.  This is mainly because they rarely come in for sale. For now, lower the stop-loss on the calls to 1.65.  With physical gold up nearly $20 at one point today, the price action in this vehicle is so abysmal it is dumbfounding. It is one thing for good stocks to be shunned at bottoms, but the level of despair reflected in the mining stocks in particular is beyond rationality.  We'll look to re-enter yet again at a

HUI – Gold Bugs Index (Last:445.35)

– Posted in: Current Touts Free Rick's Picks

It was only after I'd prepared the chart accompanying this tout that I realized HUI had breached the pattern's midpoint support at 486.57 by way of a gap-down opening. This very strongly implies that the 'D' target at 418.23 will be reached, notwithstanding the fact that we bought promising lows yesterday in GDX and GDXJ.  The only potential mitigating factor I can find in the chart is the prospect of a final low coming not from the point 'A' indicated, but from the one just beneath it at 605.37.  That pattern would play out to 427.48, somewhat better than the worst-case 418.23.  In any event, you should be ready to bottom-fish in both spots -- aggressively if by camouflage.

HUI and GDX May Have Further to Fall

– Posted in: Free Rick's Picks

The heavy look of two gold vehicles analyzed in today's touts -- HUI and GDX -- strongly suggests that this selloff has further to go. Note as well in today's touts that May Silver could have farther to fall.  Under the circumstances, we'll hold off patting ourselves on the back after nailing some nice lows yesterday in GDX and GDXJ, lest we be distracted from managing risk if these vehicles should fall anew.

ESM12 – June E-Mini S&P (Last:1393.00)

– Posted in: Current Touts Rick's Picks

You know the drill by now, and there should be no illusions about catching some sort of fabulous ride. Practically peaking, what we might catch is a swing low at the 1384.25 hidden pivot of the pattern shown.  This is not worth the effort that a diligent camouflageur might expend in attempting to make the trade riskless, or very nearly so, and I will therefore counsel bottom-fishing with a 1384.50 bid, stop 1383.75.  You'll be on your own if it fills, but I wouldn't recommend taking a position home over the long weekend. _______ UPDATE (11:59 a.m. EDT):  This one filled perfectly, since the futures bottomed this morning at exactly 1384.00.  Tracking a four-contract entry, I'll recommend exit two of the contracts now for around 1394.50. That will leave us with two and a profit-adjusted cost basis of 1373.50.  Stay tuned for a further update today, since we may actually take these home over the weekend.

With Gold Prices Falling, We’ll Take the Odds

– Posted in: Commentary for the Week of March 8 Free

Gold came down hard for a second straight day yesterday, but for all the wrong reasons. That’s why Rick’s Picks subscribers were ready to seize the opportunity with distress bids in two popular gold mining vehicles. One of them, GDX, the Gold Miners ETF, fell to within 14 cents of a 46.15 target that had been disseminated to subscribers a month ago when the price was in the high $50s.  So far, the recommendation is looking like a winner: by day’s end, with GDX settled at 46.71, the paper position was 68 cents in-the-black. The other recommendation involved GDXJ, an ETF comprised of smaller mining companies. This vehicle plummeted yesterday to a 22.74 target that had been promoted to our subscribers as a “back-up-the-truck” number when the stock was trading closer to $25. And although GDXJ fell yesterday a bit lower than we’d forecast, hitting 22.39 intraday, the bounce into day’s end brought it back to a high of 22.85 and a settlement just two cents below that.  Give it a little rest overnight, and we expect GDXJ to bolt from the gate on Thursday, the last trading day of this holiday-shortened week. Even so, we’ve instructed traders to place protective stops not far below where they got long in order to minimize exposure if GDX and GDXJ relapse to new lows. [Want to get in on our next trade via a real-time e-mail alert? Click here for a free trial subscription to Rick’s Picks that will give you that and much more, including access to our 24/7 chat rooms.] So what about our assertion that bullion and mining shares fell for all of the wrong reasons? The selloff began on Tuesday when minutes from the last Fed meeting were released. Apparently, the minutes contained no explicit word that the