Monday, August 11, 2014

Only Bears Can Make Rallies Happen

– Posted in: Free Rick's Picks

Sunday nights are frequently as turgid as Friday mornings are frenetic.  Index futures have opened a couple of points higher this evening, but I doubt whether shorts can be goaded and provoked into doing what they do best -- i.e., panic. That could change as the week wears on, of course, particularly if the right headline turns up:  'Jihadis Lay down Their Arms and Vow to Live in Peace'.  Whatever happens, though, short-sovering remains the sole source of serious buying power, and unless the bears are nervous about something, stocks will tend to go nowhere.

ESU14 – Sep E-Mini S&P (Last:1923.25)

– Posted in: Current Touts Rick's Picks

DaBoyz sprang a bear trap on Friday just beneath the Hidden Pivot low I'd projected. Notice that the resulting abcd rally topped at its D target exactly. Pivoteers may notice as well that the A-B leg is not quite up to our old standard; however, changing times call for changing methods.  That will be a key concern of the upcoming webinar on August 21. If you've taken the course, you should make a point of reviewing the new material, which I will make available without charge to all grads after the class. Regarding the E-Mini, my hunch is that the bear rally begun from last week's lows has further to go -- possibly to the 0.618 Fibonacci level at 1949.25 mentioned in this week's commentary. We'll want to try shorting there with a tight stop, but you should give preference to any clear HP resistance that may come to light in the days ahead. Strictly speaking, however, a b-c pullback following an impulse leg through the labeled peaks (#1 and #2) would be a short-term buy, possibly do-able via camouflage if the breakout above #2 is subtle enough (and especially so if #3 is not exceeded as well)

Does ‘Braveheart’ Ending Await Bears?

– Posted in: Commentary for the Week of March 8 Free

Although the Dow Industrials finished the week with a 186-point rally, there’s reason to hope that this latest, drug-addled binge will sputter out within the next two or three days if not sooner. The sleazeballs who engineered Friday’s impressive levitation had to pull out quite a few stops to make it happen. To get things rolling, they precipitously withdrew their bids Thursday night on news that Asian markets were getting socked, apparently because of bad vibes from Ukraine. The air pocket in U.S Index futures produced a quick 15-point drop in the E-Mini S&Ps – equivalent to about 120 Dow points. Now, it is not unusual for the night crew to push prices around a little when ostensibly tradable news comes their way. Such gratuitous oscillations usually occur within a relatively narrow range, and it is these nervous squiggles that make the long stretches of tedium in the wee hours tolerable for nocturnal predators. The added enticement is that there’s not much risk in this, provided one is not sitting on the can, or moaning over Russian porn, when all geopolitical or financial hell breaks loose as it sometimes does. In this case, however, because the Asian selloff was not serious enough to trigger a panic in Europe, let alone an avalanche in U.S. stocks, the downdraft amounted to a brazen heist. For perps accustomed to shoplifting, it was akin to their ordering the store manager to open the safe. The Music of Lucre The arpeggio of buying that followed was deftly played and lucrative, at least for its producers. By 4 a.m. Eastern, sellers were more or less spent when shares fell to a fire-sale level at which even widows and pensioners knew they’d been had.  It took but another hour to run up stocks sufficiently to ensure that

TLT – Lehman Bond ETF (Last:116.53)

– Posted in: Current Touts Free Rick's Picks

Subscribers hold the September 20/August 16 118 calendar spread for an effective price of 0.25 after rolling out of short August 8 calls and into short Aug 116s late last week. We will continue to do this roll every Thursday/Friday, further reducing the cost of our bullish time spread. With luck, TLT will continue its advance to our 118 target, generating ever-higher levels of weekly income when we roll the spread. Ideally, TLT will be trading near 118 when the September calls we continue to hold expire, and our effective cost basis will be a negative number -- i.e., a credit gained from shorting four or five weekly calls against them over time. As of Friday, the position was showing an $800 paper gain.  This profit is likely to keep growing even if the stock merely sits still or falls a bit. That's because we'll continue to take in premium shorting weekly options as long as they sell for more than zero.  On Friday, the August 16 calls we shorted traded between 0.06 and 0.09. Since my outlook for this vehicle is long-term bullish,  we'll continue to repeat the strategy used above in different time frames.  In the chat room, I have provided detailed instructions for 32 new spreads with a longer expiration date.  I've refrained from publishing the instructions here because I want them to be available only to paying subscribers. The information can be found in Friday's chat room discusssion, beginning with comments I made starting at 12:54 p.m. _______ UPDATE (August 11, 11:19 p.m. EDT): I'll use 0.90 as the price for Nov/Aug calendar spread that I detailed in the chat room, since several subscribers have reported filling at that price.  If you're still trying, use the delta guideline provided, which at Monday's 115.46 closing price would