Monday, December 31, 2012

SPY – S&P (Equity) (Last:141.82)

– Posted in: Current Touts Rick's Picks

We bought four January 129 puts for 0.31 based on an intraday recommendation made in the chat room and via e-mail.  Use a 0.21 stop-loss for now.  This means you should sell the puts at-the-market if they trade for 0.21 or less. _______ UPDATE (3:42 p.m. EST):  This speculation proved short-lived when the broad averages took another leg up on word of a fiscal-cliff deal. The trading loss on a 0.20 stop-out was $44.  I remain keen on getting short early in 2013, but we'll wait for a better opportunity.

DIA – Dow Industrials ETF (Last:133.84)

– Posted in: Current Touts Rick's Picks

You can see in the hourly chart (inset) just how far DIA is likely to fall if the dam gives way.  Friday's finishing stroke was bearishly impulsive to begin with, and so the 127.05 target of the pattern shown hardly seems out of line.  The p midpoint at 129.02 has already been breached, but not by enough to make the plunge a done deal. _______ UPDATE (January 3 at 2:06 a.m. EST): A powerful reversal from well above 127.05 has put this vehicle on track to hit 134.89.  This outcome would appear all but certain, judging from the way DIA gapped up through the 131.72 midpoint resistance of the pattern shown. The target can be used to get long now, or short soon, but camouflage will be tricky to find on the last leg up, given the runaway power of this move. _______ UPDATE (January 15 at 11:26 p.m. EST):  Twelve days later, DIA did indeed hit 134.89.  It actually topped 11 cents higher than that before DaSleazeballs pulled out the rug the next day with a gap-down print at 134.24 on the opening.  This brazen shakeout was followed by a rip-roaring rally that began on the next bar.  Now, I expect buyers to push this hot little mama to the 137.71 target of the pattern shown.  Camouflageurs will need a deft touch to go with the flow.

We, Too, Can Play It Down to the Wire

– Posted in: Free Rick's Picks

I'm keen on putting out a short in the Diamonds, since my hunch is that 2013 is going to start with the nasty dive the stock market's been postponing since the bad news on November 6 . It is the nature of the game, however, that getting short today will require sweating out a possible fiscal-cliff deal that could send stocks into a bullish spasm.  While it would likely be fleeting, that would be of scant consolation to anyone caught in the short-squeeze. On balance, I'll suggest staying tuned to the chat room and to E-Mail Notifications for timely advice, since I may decide to play it down-to-the-wire.

AAPL – Apple Computer (Last:509.43)

– Posted in: Current Touts Free Rick's Picks

We hold four Jan 590-600-610 butterflies @ 0.20.  Although total risk is only $80 plus commissions, the dirge that has gripped this stock for the last two weeks has made our bet a longshot.  As you know, I'd been looking for a strong year-end surge, mainly because bonus-hungry portfolio managers stood to make a pile of money if AAPL had finished Q4 on a strong upswing. Their inability to make this happen is probably the single most compelling factor behind my very bearish outlook for January and beyond. If DaBoyz cannot in fact goose this stock -- can't even arrest its fall, actually -- then they will be seriously on the ropes as 2013 begins.  Accordingly, a target at 464.99 should be held in mind as a minimum downside objective for now (60m, A=635.38 on 10/22). In any case, I'll suggest offering the 'fly to close for 0.25, a tad more than we paid for it. This order can stand as long as the stock is trading for $525 or less. The spread can certainly be sold for that much with a little work, but you'll have to decide for yourself whether it's worth it.  You might also choose to hold the spread until stocks have had a chance to react to a fiscal-cliff agreement, assuming one comes. ______ UPDATE: Apple's leap Monday above $530 has taken our spread off the table. For now, sit tight. Click here for information about the upcoming Hidden Pivot Webinar and a $50 discount.

ESH13 – March E-Mini S&P (Last:1402.75)

– Posted in: Current Touts Rick's Picks

A downside target at 1378.50 (see inset) will likely put a floor beneath any gyrations that attend inconclusive news from Capitol Hill. The 'p' midpoint associated with that number lies at 1403.50, and so a rally to that number would provide a logical opportunity to get short via camouflage. Notice as well that if the 1378.50 pivot is breached, an alternative target at 1373.75 would be in play. _______ UPDATE (10:35 a.m. EST): The futures have rallied to within two ticks of the 1413.50, but without yet producing an abc downtrend that could be shorted using camouflage.  If you initiated the short anyway with a 3-tick stop from 1403.50, continue to use 1404.25 as a stop-loss.  This morning's strength is absolutely inscrutable, at least to me, since there does not appear to be much movement toward a fiscal cliff deal with the clock about to run out.

Cliff-Mania Holds Only Bad Outcomes

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

Index futures remained hard-wired to vibrations from Capitol Hill Sunday night, nervously discounting each mood shift perhaps 30 to 40 minutes ahead of whatever web-based reports were to follow.  Shortly after 7 p.m. EST, the E-Mini S&Ps were up the equivalent of about 50 Dow points, suggesting DaBoyz were willing to go way out on a limb based on the flimsiest reasons for optimism.  For index-futures traders who make their living at night in the thinnest of markets, this amounted to a game of chicken, since any hint of a new impasse threatened to reverse the current rally, turning it instantaneously into a 100-point decline. At last glance, news reports had Republicans giving ground on a measure that would have changed the way inflation is calculated to determine Social Security and other benefit payments. It's hard to believe a formula exists that would lower the marquee inflation rate beneath where it already is. Be that as it may, as we went to press there were evidently gaping differences on some other key issues, including the Alternative Minimum Tax (AMT). [Late-breaking news: Talks adjourned Sunday night with no agreement in place.] Think You’re Safe? Whatever fiscal package emerges, it would appear that Joe Taxpayer confidently believes it's going to be someone else’s ox that gets gored. A headline in the local paper revealed the public's not-exactly-shocking ignorance about what’s going on in Washington: Shoppers Not Fearing Plunge Off 'Cliff' was how the Boulder Daily Camera presented the story-of-the-hour.  Oh really?  It's a tragedy for America that people like those quoted in the article are allowed to vote, since they in fact have much to fear, even if they are not among Obama's “filthy-rich” earners of $200,000 or more.  For starters, a steep upward skew in the Alternative Minimum Tax that is