December 2014

The last time the first trading day of the year fell on a Friday, the Dow Industrials ended the week near their highs. That was in 2009, and the rally went against a 17-month bear market that was still three months from ending. Under the circumstances, we might expect seasonality to be strongly bullish as the New Year begins. We'll soon know.  Stay tuned to the chat room if you're looking to exploit the movement now matter which way it goes.

A query about this stock in the chat room yesterday allowed for some very timely bottom-fishing that could have produced a gain of as much as $548 per round lot for any trader who caught the low.  At 11:50 a.m., in response to a question about CMG, I responded as follows: "You could bottom-fish at 680.93, a target that comes from the 5-minute chart." At the time, Chipotle shares were trading for around 683.72, down more than $9 on the day. Subscribers reported buying call options when the stock fell still lower, hitting the target on its way to an intraday bottom at 680.41.  Minutes later CMG erupted, hitting an intraday high at 686.41 that allowed subscribers an easy and profitable exit from the position. If any of you held onto a piece of it, please let me know in the chat room so that I can provide tracking guidance. _______ UPDATE (8:59 a.m. EST): Zounds!  The stock exploded in after-hours trading and is quoted at 698.98, pre-opening -- up $14 from yesterday. Since subscribers are reporting "live" positions, I'll track one of them -- four Jan 10 690 calls purchased for 6.10 (as noted by 'Dalawman' yesterday in the chat room.) For now, offer two of the calls at-the-market on the opening. They are likely to be especially richly priced at the bell, since short-squeeze dynamics will obtain.

<a href="http://www.rickackerman.com/wp-content/uploads/2014/12/Four-day-rally-has-allowed-subscribers-to-leg-into.jpg"><img class="alignleft size-thumbnail wp-image-67037" title="Four-day rally has allowed subscribers to leg into" src="http://www.rickackerman.com/wp-content/uploads/2014/12/Four-day-rally-has-allowed-subscribers-to-leg-into-122x67.jpg" alt="" width="122" height="67" /></a>A fourth straight day of strength allowed subscribers to complete the second and final leg of a $3 vertical call spread Tuesday on very favorable terms. Earlier, when TLT bottomed last week within 23 cents of a 122.70 correction target, subscribers were able to buy 16 Jan 30 126 calls for 0.80. With yesterday's rally to 126.21, the short sale of Jan 30 129 calls for the same price, 0.80, was easily accomplished. This position gives holders a shot at a $4800 gain with TLT trading 129 or higher come January 30.  If TLT is merely trading 126 or higher, the profit would come at $1600 per point. Since we effectively paid nothing for the spread no loss is possible, even if TLT plummets in the weeks ahead. For now, do nothing further. <strong>________ UPDATE</strong> (January 5, 11:29 p.m. EST):<em> TLT has had quite a move since subscribers bought Jan 30 126 calls for 0.80 -- the first leg of a vertical call spread. For now, offer half the spreads to close for 1.90. good till canceled.</em>

A fourth straight day of strength allowed subscribers to complete the second and final leg of a $3 vertical call spread Tuesday on very favorable terms. Earlier, when TLT bottomed last week within 23 cents of a 122.70 correction target, subscribers were able to buy 16 Jan 30 126 calls for 0.80. With yesterday's rally to 126.21, the short sale of Jan 30 129 calls for the same price, 0.80, was easily accomplished. This position gives holders a shot at a $4800 gain with TLT trading 129 or higher come January 30.  If TLT is merely trading 126 or higher, the profit would come at $1600 per point. Since we effectively paid nothing for the spread no loss is possible, even if TLT plummets in the weeks ahead. For now, do nothing further.

The  trade proffered Monday night worked beautifully, triggering a long-entry signal at 1185.10 that could have produced a gain of as much as $2500 per contract. Check the chart that accompanied this trading 'tout' in the archive if you want to determine whether or not you could have caught the move. Some subscribers in the chat room reported getting long, but I've yet to hear from anyone who did so using the Comex futures contract. If you bought the Februarys based on my advice, you should be out of the 3/4 of the original position and swinging for the fences with what remains. I am carrying a position in the mini-futures myself from the 1140s, persuaded by my partner to hold onto them over New Year's because of gold's so-far favorable interaction with its 50-day moving average.  Upside potential over the next 4-7 days is to the 1268.00 Hidden Pivot resistance shown. This would become an odds-on bet once the midpoint pivot at 1219.4o has been decisively exceeded.

<a href="http://www.rickackerman.com/wp-content/uploads/2014/12/Subscribers-who-bought-gold-at-1185.jpg"><img class="alignleft size-thumbnail wp-image-67033" title="Subscribers who bought gold at 1185" src="http://www.rickackerman.com/wp-content/uploads/2014/12/Subscribers-who-bought-gold-at-1185-122x67.jpg" alt="" width="122" height="67" /></a>The  trade proffered Monday night worked beautifully, triggering a long-entry signal at 1185.10 that could have produced a gain of as much as $2500 per contract. Check the chart that accompanied this trading 'tout' in the archive if you want to determine whether or not you could have caught the move. Some subscribers in the chat room reported getting long, but I've yet to hear from anyone who did so using the Comex futures contract. If you bought the Februarys based on my advice, you should be out of the 3/4 of the original position and swinging for the fences with what remains. I am carrying a position in the mini-futures myself from the 1140s, persuaded by my partner to hold onto them over New Year's because of gold's so-far favorable interaction with its 50-day moving average.  Upside potential over the next 4-7 days is to the <span style="color: #008000;"><strong>1268.00</strong></span> Hidden Pivot resistance shown. This would become an odds-on bet once the midpoint pivot at <span style="color: #008000;">1219.4o</span> has been decisively exceeded.

<a href="http://www.rickackerman.com/wp-content/uploads/2014/12/After-mid-Deceembers-blitz-the-failure.jpg"><img class="alignleft size-thumbnail wp-image-67029" title="After mid-Deceember's blitz, the failure" src="http://www.rickackerman.com/wp-content/uploads/2014/12/After-mid-Deceembers-blitz-the-failure-122x67.jpg" alt="" width="122" height="67" /></a>Mid-December's powerful two-day rally has given way to a year-ending muddle over the last two weeks. Are DaBoyz perhaps saving their energy for a short squeeze to kick off the New Year? That'd be my guess, but the idea of going home short on New Year's Eve seems so suicidal as to have a certain contrarian appeal. In any case, we'll stick with the two rally targets we've been using for the last week: a minor one at <span style="color: #008000;">2092.75</span> that is shortable, stop 2093.50, if it's reached early enough in Wednesday's session to be cover-able by day's end; and <span style="color: #008000;"><strong>2105.00</strong></span>, a very major Hidden Pivot that's unlikely to be reached by the bell. If it is, however, I'd increase the bet size of any speculative shorts using way-out-of-the-money puts. They should be treated like any 20-to-1 horse -- i.e., not the kind of bet on which you should risk the farm.

Mid-December's powerful two-day rally has given way to a year-ending muddle over the last two weeks. Are DaBoyz perhaps saving their energy for a short squeeze to kick off the New Year? That'd be my guess, but the idea of going home short on New Year's Eve seems so suicidal as to have a certain contrarian appeal. In any case, we'll stick with the two rally targets we've been using for the last week: a minor one at 2092.75 that is shortable, stop 2093.50, if it's reached early enough in Wednesday's session to be cover-able by day's end; and 2105.00, a very major Hidden Pivot that's unlikely to be reached by the bell. If it is, however, I'd increase the bet size of any speculative shorts using way-out-of-the-money puts. They should be treated like any 20-to-1 horse -- i.e., not the kind of bet on which you should risk the farm.

There are several items of particular interest in today's list of touts, including a bull trade in gold that triggered Monday evening, shortly before 7 p.m. EST; and a possible breakout in Chipotle that implies a 24% move in the weeks ahead. I'll be in the chat room Tuesday to monitor the latter, since an opportunity to initiate a trade with relatively little risk could drop in our lap. We will also be trying to turn a long position in TLT acquired at the recent low into a riskless, $3 vertical call spread. Stay closely tuned to the chat room, since it will take just a small rally to get us filled.