Thursday, August 7, 2014

DIA – Dow Industrials ETF (Last:163.49)

– Posted in: Current Touts Rick's Picks

The Hidden Pivot midpoint support at 163.62 (see inset) is well placed for tightly stopped bottom-fishing. Accordingly, I'll recommend buying four August 8 calls at the lowest strike at which calls are selling for less than 0.70 if and when the support is touched or closely approached. This could happen on an opening-bar downdraft, so you may have to be nimble.  If you're filled, stop out the position if the calls trade for 0.15 less than you paid for them, but make the order one-cancels-other with an offer to sell half the calls for 0.25 more than you paid for them. The rest will be keepers -- meaning for hours, not days or weeks. ______ UPDATE (8:50 p.m. EDT): The trade triggered, but since there was not a word about it in the chat room, I'll assume nothing done.  The trade went profitable intraday, but the Diamonds were headed lower at the bell, presumably for a rendezvous with the 162.64 target shown.  Don't lean too heavily on that Hidden Pivot, though, since this vehicle could drop all the way to 160.67 (15-min, A=168.95 on 7/30) if Friday turns ugly.

SLW – Silver Wheaton (Last:26.58)

– Posted in: Current Touts Rick's Picks

You can put that bearish target at 25.13 on the back burner for now, since the current rally is bullishly impulsive on the intraday charts. As you can see, the stock needs to push above the 26.73 midpoint resistance to get something going. A further push to its D sibling at 27.07 would not take it much further, but note that it would refresh the bullish energy of the chart by exceeding the 26.94 'external' peak recorded on July 29.  Traders please note: The last six price bars shown in the chart could produce an excellent camouflage entry set-up. ______ UPDATE (3:25 p.m. EDT): The stock swooned to a new point 'C' low without having reached 26.73, but the rebound has exceeded the new p midpoint resistance, implying more upside to the 26.83 target shown.  It'll take a smidgen more, however, to refresh the bullish energy of the chart with a push past late July's tops. ______ UPDATE (August 11, 12:01 a.m.): The rally continues to show signs of robust health, since each new thrust has been exceeding a prior high on the intraday charts (see inset, a new chart).  The pullback from Friday's high may take a day or two to play out, since the high itself, fleeting as it was, would have trapped more than a few bulls.  If you're interested in the stock, nudge me in the chat room if and when it trips another buy signal on the hourly chart, since I may be able to provide a camouflage entry strategy that would pare risk down to a bare minimum.

Of Course, the Fed Won’t Let It Happen…

– Posted in: Free Rick's Picks

Just as there is no airtight argument against the Dow Industrials wafting up to 25,000 in the years ahead, neither is there a compelling case against the possibility of a 5,000-point collapse overnight. As a betting proposition, the collapse would seem to offer far better odds, since, as we know, even the failure of a small bank in Portugal could conceivably trigger a global financial panic.  It therefore behooves us as traders to treat every rally as, potentially, the bull market's last gasp. And it is easier than you might think to avoid loss, or even make a a few bucks, when you're wrong time after time.  Find out how with a free trial subscription at this link.  One of these days we're going to be right, of course, and we think that day will come sooner rather than later.  We reserve our most withering scorn for those who believe us wrong simply "because the Fed won't let it happen."  If that is your mantra, don't say we didn't try to warn you.

ESU14 – Sep E-Mini S&P (Last:1904.25)

– Posted in: Current Touts Rick's Picks

Buyers disrupted the promising symmetry of the big ABC downtrend shown, suggesting they may be regaining the upper hand after last week's pummeling. This implies that if the futures don't break lower and achieve the 1891.25 downside target soon (meaning today), they're likely to go for the 1932.25 upside target instead. Shorts would be badly on the ropes if that happens, but it'll take more than that -- take nothing less than a full-blown, short-covering panic -- to push this erstwhile cement bag to new record highs.  My gut feeling is that the more slowly any such rally unfolds, the better the odds that bears will buy the broad averages up to new highs. Conversely, any precipitous rally is apt to burn out short-covering  quickly and well shy of a new record. ________ UPDATE (12:38 p.m.) Notes that I posted in the chat room around 6:30 a.m. caught the sleazy dynamic of this morning's open.  It featured a moderate short squeeze to a bull-trap high, then a sharp reversal to the downside.  Surprise surprise.  Because these ginned-up rallies are no longer fooling anyone, DaDirtballs will have to take stocks lower to foster enough complacency in bears to set up the next killer short-squeeze.