November 2012

AAPL – Apple Computer (Last:584.98)

– Posted in: Current Touts Rick's Picks

All signs point higher at the moment, with several bullish patterns working in concert to drive the rally. Most ambitious among them is the pattern shown, which projects to 606.08. Its 'p' midpoint lies at 589.17, which implies that yesterday's oscillations around that number are a consolidation -- a tradable one well suited to camouflage tactics.  A move to the target, presumably precisely, is not in doubt because of the way the stock gapped above the midpoint on yesterday's opening. Camouflageurs looking for a way in should zoom down to the 3-minute chart, where a small peak at 592.25 (11:12 a.m. EST Thursday) could prove most useful.  _______ UPDATE (December 2, 6:28 p.m. EST): I've refreshed the chart so that 'camo' traders can see a recent, long entry opportunity in the perspective of the one-minute bars. Theoretical risk here -- i.e., the distance between 'C' and the 'x' entry point -- is 40 cents,  but you could have cut that down significantly by using a 'timed buy-stop' to initiate the trade. This implies getting long at 'x', but sticking with the position only if it is in-the-black within the allotted time -- say, 30 seconds. I should note as well that although this particular trade would have been enticing intraday, the fact that it was signaled with just minutes left in the session on a Friday made it too risky, at least for my taste. Even so, we shouldn't lose sight of the potential reward, a trip on the northbound express to as high as 606.08.

FB – Facebook (Last:28.11)

– Posted in: Current Touts Free Rick's Picks

Traders should still be long two dozen March 30-33 call spreads for a 12.5-cent credit. We stand to make as much as $7500 by expiration, but the worst we can do in any case is come away with a $300 gain before commissions. The spread settled yesterday @ 0.82, implying a paper gain so far of $1134.  I'd be inclined to close out the position if we can extract profits of at least $3000 by mid-December, but otherwise we'll let it run, since the factors that have been driving the stock are only just starting to percolate.  Here's what the San Jose Mercury had to say earlier this week: "Facebook's stock surged more than 8 percent Monday, briefly passing the $26 mark for the first time since July, amid signs that Wall Street is regaining some of its lost confidence in the social-networking service's ability to make money."  This is exactly why we jumped on the stock when it was trading 50% lower just two weeks ago. (Note: It ended last week at 28.11, a recovery high.) Since we're sitting so fat, let's fool around with the stock today, shorting the 27.95 target shown with a tight stop-loss. Specifically, you are to offer 400 shares short for 27.93, stop 28.01.  Cover half on a pullback to 27.40, and await further instructions in the chat room and via the subscriber 'E-Mail Notifications' feature (if you are signed up for it).  We are doing this simply for the fun of it, and because our spread position will offset most of any loss. Here's why: Each spread we hold has a delta value of about 13 shares at these levels, making us long the equivalent of about 312 shares. At the 27.95 target, however, because the March 30 calls we are long would

Each New Rally Stinks Worse Than Beached Clams

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

With a closet Marxist in the White House for four more years and the U.S. economy headed into something worse than recession, we should view any significant stock-market rally as a golden opportunity to bet against the house. Under the circumstances, yesterday’s 107-point tumescence in the Dow offered a tempting opening.  Not quite yet, though.  Our coldly mechanical technical indicators say stocks could go at least somewhat higher before they become engorged to the bursting point. Speaking more subjectively, any market-watcher with olfactories could tell you that the broad averages, currently hovering within easy distance of new all-time highs, stink worse than a clam's crotch. Consider the backdrop: taxes on income and investment are about to rise steeply; public spending outside of Washington is imploding; corporate earnings have been deflating since summer; new hiring will be asphyxiated by 2000 pages of Obamacare; and America's drug-induced housing "recovery" is about to breathe its last. That last item has been a source of hope and comfort for the Administration and Wall Street, but why should we, too, be comforted by a story that has been spun by thieves, mountebanks, liars, drop culls, arse bandits and worse? When you consider what went into creating the current real estate blip-let, you start to understand why it cannot go on indefinitely.  Sure, the Fed could continue to monetize mortgage securities at the rate of $40+ billion a month, and to warehouse mountains of worthless paper associated with untold inventories of vacant houses. Unfortunately for the spinmeisters, however, the supply of qualified buyers and re-fi seekers is certain to dry up well ahead of the economy’s impending crash. Heavy Supply Concerning the stock market, look at the Dow chart above and you can almost feel the weight of supply as each distributive rally has struggled harder

BBY – Best Buy (Last:14.25)

– Posted in: Current Touts Free Rick's Picks

The stock has been on a tear this week, but I'd be surprised if it's because the cud-chewing herd has caught the bullish scent of factors cited in yesterday's commentary.  We'll sit back for now, since the 6.76 bear market target identified in yesterday's commentary still looks pretty compelling. If the stock impulses above the 14.97 peak recorded on November 16, though, we may have to jump in.  Meanwhile, the chart shows a 14.52 rally target in prospect if its sibling midpoint at 13.59 is swept aside. _____ UPDATE (December 7, 12:40 a.m. EST): The stock has relapsed after having rallied no higher than 13.49. (Please note: The "Last Price" will always be the price of the stock at the time of the original post, or, when applicable, the last update.)  _______ UPDATE (December 24, 11:58 a.m. EST): Following an idiotic, one-day short-squeeze frenzy 25% above the market, Best Buy has relapsed and is flirting with new lows.  Under the circumstances, we'll continue to wait for that fabulous buying opportunity down near 6.76.  I still think the company is on the mend, but it could still take a few months before investors have their belated epiphany. ______ UPDATE (January 15 at 1:21 p.m. EST):  An explosive rally begun last Friday holds great encouragement for beleaguered shareholders. The so far high of the move is 14.67, and although it would take quite a bit more than that -- specifically, a push exceeding 48.83(!) -- to negate the 6.76 bear-market target, the thrust so far is powerful enough to have turned the daily chart (if not yet the weekly; that would take a print at 21.61) bullishly impulsive. What this means is that, 6.76 target or not, the stock is a short- to intermediate term "buy" on any b-c pullback from 14.67

DIA – Dow Industrials ETF (Last:130.10)

– Posted in: Current Touts Rick's Picks

The short-able 'p' alluded to in today's commentary lies at exactly 132.57, and it's as good a place as any to initiate a speculative short.  We did this repeatedly in the E-Mini S&Ps with gratifying results, but I've chosen DIA as a vehicle here because it will allow subscribers with equity accounts to play.  Because there is no rule that says this vehicle must reach our target, we'll need to be alert to a downtrending impulsive leg from here on up. Meanwhile, I've set a screen alert at 132.15, which is about where we should start looking diligently for a 'logical' and tradable reversal.  If you see one and you're in the chat room, by all means please call it out. ______ UPDATE (December 2, 6:43 p.m. EST): No change. This still looks like a low-risk leveraging opportunity to me.  Make sure you've checked 'E-Mail Notifications' on the 'My Account' page if you want to receive a trading alert in timely fashion.

Diamonds Are the Play

– Posted in: Free Rick's Picks

The DIA tout in today's list provides a precise rally target where we can attempt to get short speculatively. My goal is to make this trade simple enough for relative novices to execute, but also to keep risk down to  relative pocket change (i.e., less than $100 theoretical).  If you want to be alerted to the opportunity in real time, please make sure that you've checked the 'E-Mail Notifications' box on you 'My Account' page. (And if you don't subscribe, click here for an offer you can't refuse.)

GCZ12 – December Gold (Last:1716.30)

– Posted in: Current Touts Rick's Picks

Uh-oh.  Before taking this latest dive, December Gold not only failed to reach an 'easy' target at 1763.30, it also died without having surpassed an 'external' peak at 1755.00 recorded in mid-October. In fact, last Friday's last-gasp thrust merely tied 1755.00, setting the stage for this morning's collapse, but also for a potentially lengthy slog in purgatory. Now, weakness could persist down to as low as 1629.40 (see inset), but at least to 1692.20.  Please note that the target is near the lower end of the range delineated in a previous tout that superimposed a pennant formation on the weekly chart. The conclusion was that the gold price could oscillate between around 1600 and 1800 until well into 2014.

End-of-Day Camouflage in Google

– Posted in: Tutorials

How does one trade a $700 stock in the final hour? Very carefully, of course, as this 8-minute recording makes clear. In a tout disseminated the night before, I’d suggested using camouflage to get long in Google. Using the one-minute chart, here’s one approach that would have worked, although the trade was subsequently stopped out.

GG – Goldcorp Inc. (Last:38.72)

– Posted in: Current Touts Rick's Picks

Someone posted 37.82 as an important midpoint support on the weekly chart, but I wouldn't rely too heavily on it, since the pattern (A=50.74, B=31.54, C=47.52) has a second point 'C' that will tend to diminish its reliability. Instead, I would suggest focusing on the daily-bar pattern shown for clues about whether the correction begun in May may be spent, or nearly so. If that is the case, we should see the current downtrend reverse from no lower than the 38.62 midpoint.  The rally wouldn't have to exceed the 41.65 point C of the pattern to energize bulls; all that's needed would be an impulsive thrust on the hourly chart.  ______ UPDATE (11:17 a.m. EST):  This morning's further devastation has crushed the support, implying the futures will now fall to its 'D' sibling, at least: 35.60.  A rally back up to the 38.62 midpoint should be viewed as an opportunity to get short. Camouflage is advised.