Monday, June 17, 2013

Too Many Cocksure Bears?

– Posted in: Free Rick's Picks

I've suggested fading a rally today, although index futures looked like a bull trade Sunday night.  Either play should be approached methodically, however, since hunches could get expensive if we are wrong.  A strong rally would imply there are too many cocksure bears around.

GCQ13 – August Gold (Last:1389.30)

– Posted in: Current Touts Rick's Picks

To filter out mere noise, which has become more than a little tiresome, I'd suggest setting screen alerts above and below the current market at, respectively, 1397.80 and 1368.20.  A print at the higher number would be bullishly impulsive on intraday charts (although not quite on the hourly, as you can see). The lower number is a midpoint support (see inset), and we should be concerned if it's exceeded to the downside by more than 2.50 intraday, or if the futures close beneath it for two consecutive days.  That would put a 1342.00 target in play -- presumably a downpayment on an even more bearish one at 1219.20 that we've held in mind for quite a while.

ESU13 – September E-Mini S&P (Last:1637.75)

– Posted in: Current Touts Rick's Picks

With no serious sellers to oppose them, DaBoyz are making the usual hay on a Sunday night, effecting a so-far six-point levitation in this vehicle. The bigger picture is bullishly impulsive, based on last Thursday's vicious, all-day-long short-squeeze. However, based on a gut hunch, I'm inclined to short into any strength today.  Night owls may be able to find a way to do so directly on Sunday night if the rally peters out before morning.  However, on the 15-minute chart, and most immediately, the best opportunities may come from the long side.  As you can see (inset), there's a series of external peaks that could provide an easy way to initiate a 'buy'. Ideally, any profits you make trading with the bullish flow could be used to cushion the stop-loss for the first shorting opportunity.  _______ UPDATE (11:41 a.m. EDT): The futures have exploded higher this morning, so I've posted the following in the chat room to stoke the bullish imagination: "The 180-minute chart (see inset) shows three bull patterns driving this hoax right now. In descending order of magnitude, their respective point A lows occurred on 4/18/13, 6/6 and 6/13. The first, and biggest, pattern projects to 1746.75. That is congruent with a DJIA 16800 target that has been well noted. The small, and current, frisson projects to 1660.50, and I'd make that my minimum upside projection for the near term now that the 1639.00 p midpoint has been exceeded by a decisive 2.00 points.  However, the rally will be subject to presumably niggling interference at 1643.25, the D target of the pattern starting with June 6's 1591.00 low."

DIA – Dow Industrials ETF (Last:151.85)

– Posted in: Current Touts Free Rick's Picks

In the chat room on Friday, I'd informally suggested shorting into whatever rally ended the week. However, with the Dow off 106 points at the close, this tactic would have been flouting DaScumballs' tendency to reverse Friday's polarity on Sunday nights   This they appear to be doing -- on gaseous volume, as is nearly always the case -- but we'll have to wait until Monday morning before we can fade them using puts or calls. Any such opportunity will be unpredictable via a tout disseminated Sunday night, but when the markets open Monday morning, I'd suggest looking to get short at D targets of minor, uptrending abc patterns.  Night owls looking for additional options should check out my tout for the E-Mini S&Ps, since it takes into account the six-point rally that has already occurred.  The chart shows that bears will be shooting for a move down to at least 146.21 once the midpoint support at 149.55 is busted. _______ UPDATE (June 18, 2:25 a.m. EDT):  Three large, gratuitous swings yesterday left DIA the equivalent of 109 Dow points higher. Although the rally top evinced the same chicken-heartedness that I've described in today's GOOG tout, we'll defer to insanity and not try to intercept this vehicle aggressively.  'Camo' shorts are okay at the 'D' targets of minor rallies, but it will be catch-as-catch-can.  Please feel free to query me about any possible opportunities you may have spotted if I'm in the chat room.

Bear-Market Odds

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

Are U.S. stocks in a bear market?  Although we don’t pretend to have a crystal ball, the chart below could soon give us enough information to quote odds on it. From a technical standpoint, using our proprietary method of analysis, the key feature is the 14953 low made last week.  Thursday’s swoon to that number overshot an important “Hidden Pivot” correction target at 14962 (aka ‘p’) by a hair – i.e., nine points, or 0.10 percent.  That’s not enough to regard the support as having been violated, nor to provide a solid basis for predicting the direction of the next big move. It the move is higher, however, then a 16800 bull-market target broached here earlier will be back on the marquee.  Alternatively, if the Indoos decisively breach last week’s low, we would expect the sell-off to continue to at least 14624, a three percent decline from Friday’s settlement price and a 6% fall from mid-May’s all-time high at 15542. That would be little more than a stumble, of course, since it would fall well shy of the 20 percent threshold needed to signal a bear market. A 20-percent decline would imply a 3108-point selloff to 12433.  Again, Hidden Pivot Analysis should be helpful in determining whether an initially mild selloff to 14624 – what bulls will undoubtedly regard as a healthy correction – is likely to snowball into an avalanche to 12433 or lower.  How will we be able to predict this in advance? Very simply, by closely monitoring price action at the two numbers given above: 14962 and 14624.  If the first is exceeded by more than 10 points intraday, then the second will become an odds-on bet. And if the second is exceeded on a closing basis for two consecutive days, then look out below. At that