Thursday, August 14, 2014

Something for the Novice — and the Expert

– Posted in: Tutorials

In this lesson, I reviewed some basic Hidden Pivot concepts, since there were a number of traders in the room who have registered for the upcoming webinar on August 27. We dwelled mainly on the E-Mini S&Ps in real time, since an early-morning rally offered the possibility of tradable follow-through. Alas, stocks merely marked time for the remainder of the day. But novices and experienced traders alike will find value in this recording, since it examines the psychology of a bull trade as it played out on the lesser charts.

DIA – Dow Industrials ETF (Last:167.92)

– Posted in: Current Touts Rick's Picks

If DIA pushes decisively past the midpoint resistance at 166.51 shown, it would presumably be bound precisely for the pivot's D sibling at 168.02.   I would encourage pivoteers to play the long side for now, using an uptrending abc pattern from the lesser charts to generate a buy signal. If and when 168.02 is closely approached, you should reverse the position and get short using just-out-of-the-money puts with an August 22 expiration and a 167.50 strike. A price of around 0.85-0.90 would be about right, but you may need to adjust that on-the-fly. Make the order good through Friday. ______ UPDATE (8:35 p.m. EDT):  No change. I still like this play. _______ UPDATE (August 18, 9:35 a.m.):  The target is still good, implying you should reverse a long position when it is reached and get short. Use weekly puts expiring August 29 at the 167 strike. _______ UPDATE (11:43 a.m.): Based on chat-room discussion, I've tracking a multiple of four August 29th  167 puts with an 0.82 basis, stop 0.57.  Hold tightly to the stop, since we are intercepting a speeding freight train.

GCZ14 – December Gold (Last:1296.40)

– Posted in: Current Touts Rick's Picks

If the snoozefest of the last three days ever ends, the futures could be bound most immediately for the 1341.00 Hidden Pivot rally target shown. That's assuming the next thrust is not lower, of course, but odds would appear to favor bulls at the moment, since the impulsive rally begun a little more than a week ago has not been countermanded by a downthrust exceeding any significant prior lows. In the meantime, the futures are on a buy signal that should be used cautiously -- which is to say, in conjunction with a very small, uptrending ABC pattern that has commensurately very small entry risk. As always, a decisive push past the midpoint resistance (red line) would make more upside to the target an odds-on bet. _______ UPDATE:  Zzzzzzzzz. No change. _______ UPDATE (August 15, 9:51 a.m. EDT): "Bowels move!" as the old joke goes. This morning's stupid, presumably gratuitous dive has had little impact on the still-bullish hourly chart, let alone the daily.  Even so, I need to float this worst-case low, short-term: 1278.00.

ESU14 – Sep E-Mini S&P (Last:1944.00)

– Posted in: Current Touts Free Rick's Picks

Shorts were pinned on the ropes at the closing bell, presumably just a round or two from being goaded into doing something desperate. Again. Barring an outbreak of nuclear war or some other event that could conceivably unsettle Wall Street for an hour or two, short-covering looks all but certain to drive the futures to the 1960.75 rally target shown.  At that point E-Mini S&P will have recouped three-quarters of the loss sustained in the steep slide of late July/early August. For the moment, my instruction to subscribers is to buy any pullback to the red line, an erstwhile midpoint Hidden Pivot resistance that has presumably turned into support. For bears who got short near the July top and who are intent on holding the position come hell or high water, a run-up to 1960.75 would pose both a threat and a daunting challenge. My advice would be to cover the position if 1960.75 is hit today, and to plan on re-shorting at the next Hidden Pivot rally target that develops. This is notwithstanding the fact that a short from 1960.75 promises to deliver a tradable pullback and perhaps a small profit.