January 2013

GS – Goldman Sachs (Last:150.14)

– Posted in: Current Touts Rick's Picks

We've waited patiently for the stock to reach a long-term rally target at 149.42 (see inset).  It is nearly there, and to get short I'll suggest buying four March 145 puts when the stock is within six cents of the target. The calls settled at 3.53, but it's difficult to estimate where they'll be trading with GS $2.30 higher.  We'll risk $100 theoretical on the trade, stopping ourselves out of the options if they trade for 0.25 less than we've paid for them. _______ UPDATE (12: 10 p.m. EST):  We'll use 2.75 as a basis for four March 145 puts. This is toward the high end of the buying range reported in the chat room. Let me suggest a rigid, uniform stop-loss for all players at 2.25. This is more than the $100 I'd intended to risk initially, but Goldman's rally just seems so miserably STUPID at this point that we'll want to give our short position just a little extra room.

SIH13 – March Silver (Last:32.055)

– Posted in: Current Touts Rick's Picks

Silver looks ready to pull gold higher, and it wouldn't take much to turn the intraday charts quite bullish. Notice in the chart that there are three peaks within 80 cents of current levels, two of them legitimate 'externals'.  I've set an alert at 32.800, a tick above the highest of the three, and it would be more than a little encouraging if it gets hit within the next day or two by an uncorrected upthrust.

GCG13 – February Gold (Last:1677.30)

– Posted in: Current Touts Rick's Picks

From a Hidden Pivot perspective, there was nothing to see yesterday.  Although the futures were up more than $20 at one point, the rally merely brought them to the approximate midpoint of a tedious trading range that has traced out since mid-December.  Before we get excited, let's stipulate that the futures must blow past the two peaks shown without a correction. The #2 peak at 1704.40 is not a true 'external' high, but any unpaused thrust that exceeds it and #1 will be good enough for government purposes.

FB – Facebook (Last:30.17)

– Posted in: Current Touts Free Rick's Picks

Sooner or later, our turn on the hot seat was going to come. And now it has, with Facebook shares currently in the throes of a headless chicken dance following the release of Q4 earnings after Wednesday's close.  I've reproduced a five-minute chart that shows how Wall Street's best and brightest are taking the news. Not well, for sure, since, after some extremely wild swings, the stock is down about 5% on word of 40% revenue growth. Profits were down 79% as well, but this reportedly was due mainly to the cost of some new initiatives and charges related to employee stock. The numbers supposedly were in line with expectations, but as always, it's who is doing the expecting that matters, not the numbers per se. Perhaps cooler heads will prevail on Thursday, but there's little point trying to second guess these whackos on a day when they've swung the stock 13% in mere minutes.  For our part, we continue to  hold a bull spread that is guaranteed to make money  — two dozen March 30-33 verticals legged on in November for a 12.5-cent credit.  We'll bank as much as $7500 if Facebook is trading above $33 come March 15, but no loss is possible since we own the position for a net credit of $300.  Click here to sample Rick's Picks free for a week.

Adjusting the Crosshairs

– Posted in: Free Rick's Picks

There's a small spread separating my targets for the futures-based S&Ps (INX) and the equity-based SPY.  It is the latter for which I've provided a shortable target in today's touts, as well as a precise strategy for doing so using put options. Check it out if you've been itching for action.  I will also be tracking a bullish butterfly spread in Google, since several subscribers reported fills at a price only slightly worse than I'd recommended.  Click here to sample Rick's Picks free for a week.

AAPL – Apple Computer (Last:458.43)

– Posted in: Current Touts Free Rick's Picks

While it's always possible that Apple has hit bottom, you should check out the chart before jumping in aggressively. A 394.93 downside target proffered here earlier still looks compelling, as does the objective of shorting any rally that reaches the 494.59 midpoint pivot of the pattern shown. There is almost certain to be a struggle if Apple gets there, and so the trade would need to be initiated via camouflage. The good news -- or at least, short-term-bullish news -- is that the red line looks magnetic and can probably be used as a minimum upside-correction target from here. 

SPY – S&P (Equity) (Last:155.43)

– Posted in: Current Touts Rick's Picks

A 1551.12 target proffered in today's $INX tout finds its equivalent at exactly 155.67 in the equity-based SPY chart shown here.  It is a place where we should plan on shorting aggressively, and although we'll leave ourselves an out as always in case it doesn't work, this trade deserves a little more leeway.  The target is unlikely to be reached today, but we should plan on buying four March 155 puts for around 2.35 if and when SPY gets within 0.20 points of the target. That price is a guesstimate based on the current price of the March 150 puts.   We can fine-tune the bid when the opportunity firms, but my explicit intention is that we not pay up more than a few cents, since every penny counts when you're on the buy side of a put trade. ________ UPDATE (March 11, 1:40 a.m. EST):  With March puts expiring in a week, you could have bought April 155 puts instead for around 2.40 on the opening.  The Marches traded between 0.99 and 0.84, but I'll wait until I hear from traders in the chat room before I establish a tracking position.  For now, however, I'm recommending that you stop yourself out of any puts acquired if they trade 0.20 below the purchase price. Alternatively, if they trade for 0.30 more than you paid, cash out of half. ______ UPDATE (March 18, 1:05 p.m. EDT):  Only one fill was reported in the chat room, and because it was stopped out, I'm dropping guidance for the trade.

INX – S&P 500 (CME) (Last:1511.29)

– Posted in: Current Touts Rick's Picks

A chat-room denizen posted a dandy SPX chart yesterday showing a target at 1502.76 that looked both precise and compelling. The index had yet to punch through the resistance, but it clearly was not backing off. In the end, buyers bulldozed their way higher, scoring their seemingly umpteenth gain in the last umpteen days.  When such a beautiful Hidden Pivot gets schmeissed, as this one did, we should look to the larger charts to explain it. Notice in the daily chart reproduced alongside that there is yet one more rally target even more daunting than the one breached yesterday. It lies at exactly 1551.12, and you don't need me to tell you we'll want to short the bejeezus out of it when the S&Ps get there. Which they will. We'll use a tight stop-loss even though it seems inconceivable to me that buyers will make much headway above the resistance, at least the first time it's hit.  We'll do the actual trade using equity options, so check out today's SPY tout for detailed instructions. _______ UPDATE (February 5, 10:26 p.m. EST):  I'm going to retire this tout to an inside page for now, since the target is well above.  You should set a price alert around 1545 nonetheless, since we'll want to take advantage if bulls get close.

Predicting the Fed’s Endgame

– Posted in: Tutorials

Although we don’t usually try to explain one chart in relation to another, it’s tempting to look at price action in T-Bonds, the dollar and the euro as being not only connected, but capable of predicting what the future may hold for the global financial system. During this session, we focused on these three vehicles, and the yen as well, to give us a speculative basis for describing the perhaps unintended endgame of the Federal Reserve & Friends.