I don't like the way stocks are acting here, not one bit, but I nevertheless advised covering an E-Mini short from 1982.50 because, for me at least, discipline always comes first. This is especially true when attempting to short a bull market that has been chugging along for 64 months. In practice, it has become extremely difficult to be long OR short from these levels, since the uptrend has turned into a ratcheting short squeeze that stresses bulls and bears alike. On balance, I'd much prefer to be short rather than long here, but I'm not so tempted as to leave risk open-ended.
Friday, July 25, 2014
ESU14 – Sep E-Mini S&P (Last:1979.25)
– Posted in: Current Touts Free Rick's PicksThe futures have sold off moderately after making a marginal new high on Thursday. Even though they could be carving out an important top here, I adhered to a tight stop-loss nonetheless because that's the way I do things, always following my discipline. However, if you held onto the short from 1982.50 and want me to establish a tracking position for your further guidance, please let me know in the chat room. It is already implied that you'll need a pullback to at least 1973.50 before implementing a trailing stop, since you've already weathered a 3.00-point swing against the position.
GDXJ – Junior Gold Miner ETF (Last:42.96)
– Posted in: Current Touts Free Rick's PicksAs GDXJ was working its way south from around $43, my bearish forecast called for a washout low at exactly 40.42, a Hidden Pivot support of great clarity. I'd suggested buying down there 'aggressively' and with an 'absurdly' tight stop-loss. This advice would have paid off handsomely for anyone who followed it, since the stock trampolined 64 cents yesterday off an actual low of 40.43, a penny from my target. Since a subscriber reported doing the trade as advised, I'm establishing a tracking position for the further guidance of all who may have gotten long. (He reported having bought 1000 shares off a 40.44 bid, but I'll assume a more conservative 400 shares.) Accordingly, I'll recommend exiting half the position on Friday's opening if you haven't done so already. We'll impute any profits thereof to the cost basis of the 200 shares that will remain. _______ UPDATE (July 27, 9:48 p.m. ET): Exiting 200 shares on Friday's 41.20 opening leaves us with a tracking position of 200 shares whose imputed cost basis is 39.66. Exit another 100 shares on today's opening and tie the rest to an impulse leg-based stop-loss on the 15-minute chart. At the moment, that would imply bailing out on an uncorrected dive touching 41.73. ______ UPDATE (July 28, 11:46 a.m.): We got sleazed when DaBoyz opened the stock on the so-far low of the day, 42.40. The good news is that such shakedowns usually occur because the smart money is trying to buy the stock. In any event, I am tracking a 100-share position with an effective cost basis of 37.25. For the time being, let it run. _______ UPDATE July 29, 7:23 p.m. EDT): Let's turn the position into a covered write if GDXJ slips beneath 42.25 today (see inset, a new chart). Specifically, you
