Wednesday, April 24, 2013

Yet another failed rally has generated a bull/bear duel that favors the latter at the moment. I've refreshed the chart to show a new downside target at 10.67, subject to last-ditch support at p just 16 cents beneath yesterday's bottom. The target itself lies a mere 1.10 from a potential bear-market low I'd projected at 9.57, but I must admit that I hadn't envisioned the stock getting there so quickly.  Bulls who have been on the sidelines should look to buy the lower number aggressively. In the meantime, however, GDXJ looks more promising as a short sale. _______ UPDATE (1:29 p.m. EDT): GDXJ opened on a bullish gap this morning and looks bound for a beautifully clear target at 12.61.  It will need a tick more than that, however, to refresh the bullish impulsiveness of the lesser charts.  The can't-miss pattern projecting to 12.61 is based on the following coordinates on the 15-minute chart: A=11.30 (April 18 at 10:30 a.m.; B=12.28 (April 22 at 9:45 a.m.); and C=11.63.

The rally begun a week ago looks too tired by now to suggest it's going anywhere, although there are purely mechanical reasons, still, for trying to squeeze off a bull trade.  Using the third point 'C' of a presumptive consolidation yields a D target at 1451.40 and a 1427.70 midpoint.  The entry trigger for this pattern has been tripped, but we should focus on a lesser pattern that could get us aboard with significantly less risk. A point B high has yet to be formed, but notice that the potential set-up already has a (very subtle) single-bar A going for it.  I have sketched a few hypothetical bars to guide camouflageurs, but even if no trade develops, price action relative to Hidden Pivots in both patterns could be revealing with respect to gold's mood right now.  _______ UPDATE (10:58 a.m. EDT): The pattern I'd sketched yielded a 1423.60 'camo' entry and a profitable exit on half the position at the 1426.90 midpoint.  Its 1433.60 target was not achieved, however, and exit from the remainder of the position, for a scratch, would have come at 1420.10 if based on the creation of a bearish impulse leg on the chart shown. As of the moment, gold's 30-min chart is impulsively bullish, but the futures are breathing too offer much encouragement.

In the chat room, in response to a query, I suggested incorporating yesterday's hysterical swoon into any target calculations or camo strategies. I'm curious myself to see whether this works, but regardless, there is likely to be something to learn. On the lesser charts, the pattern itself is clear if erratic, and it yields a short-term rally target at 1583.00. Notice that price action relative to the midpoint support is increasingly looking like a consolidation, implying that camo traders should position from the long side.  There are no true 'external' peaks to leverage for this purpose, but the three I've highlighted should suffice.

If there were any doubts that it is mainly clowns and their algorithm-driven trading programs that make stocks go up and down, check out the whoopee cushion price action in Apple following the announcement of earnings after Tuesday's close. It took just a couple of minutes for the hysteria to climax, then another 90 for it to detumesce.  What kind of trader would even deign to participate in such foolishness?  The answer, of course, is a trader who is not human. However, the rest of us should know by now to stand back when earnings on a widely watched company like Apple are announced. Dare we hazard a forecast for Wednesday, since the very solid earnings that were announced somehow fell short of expectations? Our take is that the analysts grossly overpaid paid to do the expecting have fallen short.  No matter. We'll stick with a 365.80 downside target given here earlier, or 326.12 if it is decisively breached.  Accordingly, traders should position from the short side, keeping in mind that 'camo' entries can be sharpened to yield theoretical entry risk of less than 25 cents per round lot.  The stock's 3-minute chart is that predictable, even if there are moments when slapstick takes a free hand.

Trading profitably can be harder than it looks. Many who have struggled toward this goal think that just because they’ve figured out a way to hold losses down to $30 of $40 a day, that only a small improvement is needed to turn those losses into steady, daily profits. This is in fact a deception, like the carnival midway game where one gets three pitches to knock down some milk cartons. Lots of players manage to scatter one or two of the cartons with the first pitch. But try knocking down the last and you’re likely to come away thinking that a Category 5 hurricane couldn’t do the job. So it goes with trading. Anyone with even rudimentary risk management skills can find a way to lose “only” $50 a day. But making $50 on average? That’s quite a trick. So how do we get our students over the hump?  Since 2001, more than a thousand traders have learned the Hidden Pivot Method, currently taught in a six-hour webinar over two consecutive evenings. (Click here for details concerning the next. Or here for a free trial subscription to Rick’s Picks so that you can ask webinar grads for yourself.) We tell each student up front that it will take patience, diligence and practice to achieve consistent profits. Immediately after taking the course, most students, even novices, are capable of trading stocks, options or futures without getting hurt too badly. Mainly, it is a matter managing risk with “impulse legs” rather than with conventional stop-losses, and of initiating trades using a “camouflage” strategy that’s designed to reduce the stress of trading. Of course, not getting hurt too badly is hardly succeeding.  That takes considerable practice, and the best way to get it is by attending the online tutorial sessions offered each