Thursday, June 12, 2014

Betting Against Our Own System

– Posted in: Tutorials

Many subtle things to appreciate in this week’s lesson, including a perfect, tradable low at 1940.00 in the E-Mini S&Ps and a very juicy shorting target we may get to use in in NFLX. I continue to pay particular attention to ‘contrary’ opportunities that go against the conventional rules of ABC trading: entry points that follow ‘sausage B’ highs or lows, and the most contrarian play of all: shorting at the long-entry signals of ABC patterns that are all too obvious. We also spent a little time on the 15-second bar chart in the E-Mini, discovering in the process that although this algo-driven vehicle has grown increasingly difficult to trade, it can still be beaten. A case in point is the 1940.00 target noted above. In this lesson, I elucidate a half-dozen reasons why we should have been willing to bet the farm on the target, albeit with a stop-loss as tight as three ticks.

GCQ14 – August Gold (Last:1260.80)

– Posted in: Current Touts Rick's Picks

For reasons that I will explain soon, I've just turned even more bullish on crude than the $119 target I've been using would imply. My reason has especially bullish implications for gold, implying that the rally begun with last Thursday's spike may be just a booster thrust. Gold's chart at the moment is much too placid, considering the news that is about to send it higher. In any event, the nearest Hidden Pivot target lies at 1269.30 (see inset) and even though the futures pussyfooted embarrassingly yesterday, they should make short work of the target if they catch a whiff of the same scent from Mosul  that I've caught.

Crude Oil to the Moon…and Maybe Gold, Too

– Posted in: Free Rick's Picks

July Crude is taking its sweet old time getting off the launching pad, considering that Mosul and Tikrit just fell to Islamic radicals.  The news was out earlier this evening, but it wasn't until around 4 a.m. EDT that the futures blasted out of a consolidation pattern with enough wattage to push them -- presumably just for starters -- over the very near term to at least 106.75, a 'Hidden Pivot' target.  That would be a down-payment on the $119 technical target I posted three weeks ago, when I was unable to imagine what would cause the price of crude to turn so strong. For now, I've posted a time-stamped trade entry at 104.79 in the chat room, so that's where you should head if you want to stay on top of this, um, 'developing situation.' The ISIS jihadis have few friends in the region, and it is by no means certain they will move on Baghdad. They would face fierce resistance there not only from Shia militias whose stronghold is in southern Iraq, but also, possibly, from Iranian Shiites. Even if the ISIS jihadis merely consolidate their gains without taking Baghdad, the fear they've already aroused has extremely bullish implications for crude oil futures. To me, at least, tonight's market action seems like a rare no-brainer trade, although in the U.S., only insomniacs will be able to take advantage of it.  Gold has yet to budge, but it has been comatose for so long that it may take a good kick in the ass before bullion traders see what the oil traders are seeing. Bad News for Europe Meanwhile, Europe may be about to rediscover that even though it has grown more frugal than ever about burning fuel, that supply can impact prices as much as demand. As for

DIA – Dow Industrials ETF (Last:168.35)

– Posted in: Current Touts Rick's Picks

he decline that followed Monday's upthrust to within 0.37 of a 169.95 target has effectively stranded our short offer.  Although the target remains viable, you should cancel the trade for now. The 171.67 target shown looks even more appealing, and we'll take a crack it when it gets within range. More immediately, since the target implies a rally of at least $3 in the offing, we can attempt to get long for what could turn out to be an exhaustion spike. I'll provide real-time guidance for this task in the chat room to all who are interested.

ESM14 – June E-Mini S&P (Last:1943.00)

– Posted in: Current Touts Free Rick's Picks

I staked out a long position in the chat room yesterday afternoon with a set of explicit instructions provided in real time.  Although the trade had the potential to produce a $150 profit per contract on a move to the 1946.50 target, I'm recommending that you ditch it now unless you're keen on staying up all night to monitor it.  Like all 'camouflage' trades, the purpose of this one is not to make a big score, but to establish a relatively low-risk, low-stress entry point.  This we did, taking partial profits early on with the goal of holding a small piece of the original position for a potential four-bagger.  If that holds true for this vehicle, you know where it's going. If you don't, check out my 11:24 post in the Rick's Picks Banter Room for a very important target that we'll want to short aggressively. _______ UPDATE (1:14 p.m.): Based on a report from a subscriber in the chat room, I am reinstating tracking coverage for a big-picture short that was initiated at 1954.25, two ticks off the all-time high.  Assuming two contracts remain from an initial position of four, and that their basis has been lifted to 1960.00 by partial profit-taking so far,  I'll recommend an impulse leg-based stop-loss (ILBSL) using the 60-minute chart.  At the moment, that would put the stop at 1952.00.  Keep in mind that the rally would need to be uncorrected once above 1947.75.

PCLN – Priceline (Last:1251.73)

– Posted in: Current Touts Free Rick's Picks

Priceline went on the warpath yesterday when its deft handlers used a gap-down opening to set the hook for 45 minutes of frantic short-covering. The resulting rally was a humdinger -- a 30-pointer that barely corrected before the squeeze resumed in the final half-hour of the session.  The dust had not settled by day's end, and the stock looked bound tomorrow for the 1259.50 target shown.  That would equate to a nearly 4% move, with most of it taking place in under two hours.  I wouldn't deign to suggest that getting aboard for the implied last 10 points will be easy, but night owls could get their chance using a 'camouflage'-style entry off the very lesser charts.  _______ UPDATE (12:31 p.m.):  The rampage had little trouble exceeding my target, implying still higher prices are coming.  Now, the two-minute chart yields a Hidden Pivot projection of 1276.83. This is contingent on a move through the midpoint pivot at 1262.88. That last number will remain viable as a minimum upside projection as long as 1248.93 is not exceeded to the downside.