Friday, November 7, 2014

TLT – Lehman Bond ETF (Last:118.15)

– Posted in: Current Touts Rick's Picks

In after-hours trading, TLT has fallen to within two ticks of the 118.13 target where we'd been looking to buy call options during the regular session.  We still are, but we'll need to wait and see how recovery hubris plays out following the 8:30 a.m. release of jobs data by the Department of Labor. The over/under bet is 235,000/200,000, but the way TLT hs been acting, and based on the bullish look of the S&P 500's charts, it seems likely that job growth for October will exceed expectations. That said, even a small disappointment would send bond prices soaring, since they got hit hard yesterday on speculation that a blowout jobs number was coming.  Alternatively, and even if TLT rallies on Friday, we should expect a relapse to 116.69, a compelling Hidden Pivot target that I mentioned in the chat room. It's based on these coordinates from the hourly chart: a=125.57 (10/15); b= 120.48 (10/17); and c=121.85 (10/20). It is at this target where we should plan on doing our most aggressive buying, initiating the long side of a vertical call spread that we may be able to turn riskless by legging into some short calls on a rally.

ESZ14 – December E-Mini S&P (Last:2028.50)

– Posted in: Current Touts Rick's Picks

The 2037.50 rally target we've been using comes from the long-term charts, but the 'hourly' provides an alternative at 2055.25 that would become an odds-on bet if the lower number is exceeded by more than a few ticks.  Both numbers should evince tradable stopping power, but you should attempt to exploit this opportunity only if you've made a few bucks on the way up.  Should you find yourself in this enviable position, don't hesitate to take a small short position home over the weekend. The mere fact of Friday rallies being too, too scary to short is reason enough to try it anyway, at least in a small way.

The Rising Din of ‘Recovery’ Hubris

– Posted in: Free Rick's Picks

Two charts suggest that delusions of economic recovery will be sharply on the upswing Friday, celebrated on Wall Street with a preternaturally strong rally in stocks and a correspondingly merciless thwacking of T-Bond prices. We've been using a 2037.50 rally target for the E-Mini S&Ps, but check out the chart accompanying today's tout if you want to see how much higher the futures could go if that Hidden Pivot fails to contain the rampage. There could be opportunity in this, however, since Rick's Picks has been looking to "buy the dips" in TLT, an equity-based vehicle that tracks price movement in T-Bonds.