The 150.39 rally target shown is a tempting spot to try shorting, since the ABC rally pattern has many characteristics that we like. Accordingly, I'll recommend buying four July 146 puts if DIA trades above 150.35. Stop yourself out if the puts trade for 0.20 less than you paid for them. You could also offer 400 shares short at 150.37, stop 150.47. ________ UPDATE (10:50 a.m.): Today's comically stupid rally has gotten us filled a hair off the so-far high. For tracking purposes, and based on reports in the chat room, I'll use a 0.79 fill on the puts, implying you should stop yourself out if they trade for 0.59. Our theoretical risk, commissions included, will be about $100. ________ UPDATE (June 28, 11:00 a.m.): Just to have something to shoot for, let me suggest offering four July 142 puts short for 0.82 against the July 146 puts we own for 0.79. Mark the order good-till-canceled. Sure, this is greedy and overweaningly ambitious. But we are worth it! My strong gut feeling is that the dumb consumer-spending story that catalyzed Wednesday's feeble short-squeeze is about to be overwhelmed by the hugely more important story that the Fed-engineered 'housing boom' is deader than Kelso's nuts. In any case, the stop-loss I've advised limits theoretical risk to $100, commissions included.
Thursday, June 27, 2013
Worst Case for Copper
– Posted in: Free Rick's PicksCopper could fall a further 10%, to as low as 2.6955, before finding traction. Check out today's tout for specific details, along with a risk-averse strategy for bottom-fishing at a lesser Hidden Pivot target either today or tomorrow.
HGU13 – September Copper (Last:3.0635)
– Posted in: Current Touts Rick's PicksIf the futures close beneath this week's 2.9855 so-far low, expect further slippage to at least 2.9765, the next Hidden Pivot support in the sequence shown. Camouflageurs keen on bottom-fishing should look for an entry spot on charts of minute degree or less. Notice that the highest possible 'A' here -- a one-off, in this case -- implies a bear market low at 2.6955, a 9.4% fall from these levels. ______ UPDATE (July 1, 2:00 a.m. EDT): The support noted above has held so far, but if the rally is the real McCoy it should be able to at least equal the 3.235 D target of (60-min) A=2.9855 (6/25); B=3.0935 (6/25); C=3.0155 (6/27). _______UPDATE (July 8, 2:28 a.m. EDT): The rally appears to have failed from a high at 3.1790 that fell well shy of my benchmark.
GCQ13 – August Gold (Last:1239.90)
– Posted in: Current Touts Rick's PicksToday's commentary describes exactly what must happen for Comex Gold to generate the most bullish signal we've seen in months. Specifically, the August contract must surpass the two labeled peaks without a corrective pause once the first has been exceeded. That would create a bullish impulse leg on the hourly chart, with the implication that any subsequent pullback be viewed as a buying opportunity. Camouflageurs, take note: If the b-c pullback comes from a high just a tick or two above the 1254.30 peak (#2), that could provide a very subtle -- and therefore low-risk -- way to get aboard.
ESU13 – September E-Mini S&P (Last:1607.75)
– Posted in: Current Touts Free Rick's PicksThe futures head-butted a 1601.00 midpoint resistance three times yesterday (see inset), implying that if and when bulls exceed it they'll be on their way to exactly 1613.25, its 'D' sibling. Both a long and a short are therefore possible today, with camouflage as the method of choice. If you'd prefer the lazy man's approach, however, you can simply short 1613.25 with a 1.00-point stop-loss. Position size should be limited to a single contract. _______ UPDATE (12:41 p.m.): The 1.00-point stop-loss proved a tick too tight and took us out of the trade at the intraday high. One chat-room denizen evidently got a nice ride using a 1614.75 stop-loss, which, for purposes of risk management, implied taking a partial profit at 1608.75. The gain would have been 4.50 per contract, or three times what was initially risked.
