Netflix's so-far $37 selloff has followed a peak last week at 475.87 that slightly overshot a Hidden Pivot at 474.50 I'd characterized as 'a big-picture target where an important top is even more likely.' A chat-roomer who evidently took this prediction to heart reported buying puts last Thursday for 1.24 that he cashed out for 8.90 yesterday. This could be just the start of NFLX's comeuppance for all those who inflated this gas-bag to undeserved heights. If you took a position and are still holding it, please let me know in the chat room and I will update guidance. For now, though, let me suggest that you take profits on half of any short position entered near the recent top. _______ UPDATE (July 10, 10:23 p.m.): Bears failed to achieve a Hidden Pivot target yesterday, presumably because DaBoyz shook the stock down so hard on the opening bar that it exhausted sellers prematurely. The missed target suggests that traders will enjoy decent odds bottom-fishing the midpoint pivot shown at 433.62 (see inset, a new chart) with a stop-loss as tight as 8 cents. If it's hit, expect the selling to continue down to at least 423.05, a Hidden Pivot that can be bottom-fished with as tight a stop-loss as you can abide. _______ UPDATE (July 14, 11:07 p.m. EDT): A turn from 428.20, precisely between the two pivots flagged above, left our bid high and dry. The bull leg that has followed could be the start of a rally cycle with the potential to reach 486.86. First, though, let's see whether buyers can tackle a midpoint pivot at 457.53 that is associated with the target. _______ UPDATE (July 16 at 6:47 p.m.): Let's not overlook the downside -- specifically, the 433.69 midpoint pivot and its D sibling at 411.67. Bears
Wednesday, July 9, 2014
When Was the Last Time…
– Posted in: Free Rick's PicksMonday's mild selloff looked like it was orchestrated just to jerk the chains of the apparent multitudes who went into the holiday weekend confident that the market could go nowhere but up. However, yesterday's follow-through added a more than merely mild selloff, and it will start to become interesting if the weakness extends into Wednesday. Can you recall the last time the stock market sold off three days in a row? I can't. Anyway, Mr. Market cannot long avoid tipping his hand, and soon, so we'll just have to wait and see. For a more technical assessment, check out today's tout for the E-Mini S&Ps.
ESU14 – Sep E-Mini S&P (Last:1961.25)
– Posted in: Current Touts Free Rick's PicksWe shouldn't get our hopes too high that the stock market may finally be deferring to reality -- i.e., to a U.S. economy that is showing real or incipient weakness everywhere it counts: in retail sales, housing, incomes, spending at all levels of government other than Federal, etcetera. Yesterday's seemingly sharp decline did little technical damage to the hourly chart, let alone to the daily, and sellers were showing signs of exhaustion just three bars into the session. We'll be better able to judge their resolve when we've seen how the follow-through leg plays out, assuming there is one. The key idea is that robust bull trends produce corrections that do not reach their Hidden Pivot targets. For your guidance, I've sketched this hypothetically in the accompanying chart.
