Tuesday, June 17, 2014

GCQ14 – August Gold (Last:1268.30)

– Posted in: Current Touts Rick's Picks

Gold is getting whacked Monday night, presumably because the fever of war in Iraq has cooled somewhat. As we might have predicted, crude oil quotes have eased only slightly. Most likely, this is because energy traders are not so stupid as to breathe an ostentatious sigh of relief merely because Baghdad has not yet erupted in flames. Perhaps this won't happen; instead, the 5000 ISIS radicals will get slaughtered by Shiite militiamen, to the unexpected delight of the geopolitical word. That would play particularly well in America, where tragedies with happy endings have become a staple of Hollywood. On Wall Street, however, it is the stuff of which short-squeeze rallies are made. But clearly not in bullion. The chart shows where August Gold's troubles began: a tad shy of a Hidden Pivot target at 1287.40. Targets that clear and compelling should not just be reached, but exceeded, if bulls are about to romp. In fact, shortly before midnight the opposite was about to occur -- with a retracement that looked likely to exceed its target, 1265.80. The so-far low is three ticks above it, at 1266.10 -- a good place to have tried bottom-fishing with a 'camouflage' entry on  the lesser charts. But if the 'hidden support' gives way, look for more selling down to 1260 or so, where bulls consolidated last week for a three-day rally that now looks to have been gratuitous.

GDXJ – Junior Gold Miner ETF (Last:38.68)

– Posted in: Current Touts Rick's Picks

Yesterday's relapse after GDXJ failed to take out last Thursday's 39.71 high should be viewed as a short-term negative, but the daily chart remains robustly bullish and projects significantly higher.  My target for the next 3-5 weeks is 47.38, but it is predicated on a decisive push past the 39.91 midpoint (red line), where the stock has remained stalled for the last three days.  Traders familiar with the 'camouflage' entry technique should note that there are some nice entry-handholds in the form of 'external peaks' notched along the path of March's steep decline.

Short-Covering Rally Was Pretty Lame

– Posted in: Free Rick's Picks

DaBoyz put the squeeze on shorts once again yesterday, mainly because the news from Iraq over the weekend had not taken a turn for the worse. Under the circumstances, however, we might have expected the Masters of the Universe to milk more than a 5-point Dow rally from a quiet tape. This game will be a little more difficult to play on a Tuesday, absent the pent-up buying orders that typically accompany a Monday opening when the news isn't so bad. If short sellers are still skittish, however, the outcome could be another draw.

NFLX – Netflix (Last:465.71)

– Posted in: Current Touts Free Rick's Picks

Subscribers came away from a suggested short from 429.94 with a modest profit yesterday even though the stock spent most of the day in a ratcheting short-squeeze that eventually took out Friday's high. I established a tracking position based on a short-stock entry confirmed by a subscriber in the chat room. In the future, however, I would strongly recommend that you use out-of-the-money puts and calls due to expire in three to five weeks, since they are easier to manage than straight-stock positions. In this case, the goal would have been to turn any puts bought near the initial high in the stock into a risk-free vertical bear spread.  This would have been relatively easy to accomplish yesterday, since the stock fell more than $5 after topping within 69 cents of the 429.94 Hidden Pivot target I'd furnished. I am more than a little interested in shorting Netflix, of all stocks, because I consider it the most overrated and overpriced gas-bag among the high-fliers. NFLX's streaming catalogue stinks, their movie-selecting algorithm works poorly, competition is tough in a business with few entry barriers, they are beholden to just a few broadband carriers, and their foray into the content business puts them in tough competition with the likes of HBO. Under the circumstances, we should try to short the stock at every opportunity -- i.e. at Hidden Pivot targets that promise to generate tradable price reversals. The next such target lies at 431.55, but we'll want to steer clear of it because a print there would generate a bullish impulse leg on the hourly chart. For more-nuanced guidance in real time, tune to the chat room on Tuesday.  If you're interested but don't subscribe, click here for a free two-week trial. No credit card is necessary._______ UPDATE (9:45 a.m.): How very