Wednesday, January 14, 2015

In Search of Risklessness

– Posted in: Tutorials

Skip the first eight minutes, which were marred by technical problems, and cut to the chase. Once again, we zoomed down to the very lesser charts in search of subtle trading opportunities in a few of our favorite vehicles, including gold and the E-Mini S&Ps. We also spent some time examining the option grid, since it has the potential to reward us with trades that are as close to riskless as conceivable.

As Apple Goes, So Goes the Stock Market

– Posted in: Free Rick's Picks

The broad averages are unlikely to emerge from their tedious dirge until the shares of Apple, the most valuable stock in the world, get in bullish gear. This will happen soon or later, but I've suggested an option strategy in the meantime that we can use to keep ourselves from falling asleep. For details and a chart that shows the provenance of a 129.20 target, check out today's AAPL tout.

BABA – Alibaba (Last:96.31)

– Posted in: Current Touts Rick's Picks

Bah-bah has had well publicized troubles enticing big foreign vendors aboard. If this is just growing pains, we should see the stock bottom near the 97.23 Hidden Pivot support shown. There's implied room to short the last few points to the target, but officially I'll recommend bottom-fishing if and when it's reached. Specifically, buy four January 30 102 calls with the stock trading within 0.05 points of the target. My guess is that the calls will be trading for around 1.00, but you can hone your bid based on the actual bid/asked spread at the time of the trade. Your bid should be about midway between bid and asked. _______  UPDATE (January 15, 11:49 p.m.): The calls never got within a mile of our quite reasonable bid, but if you bought any at any price you would have had a chance to take a partial profit when the stock rallied from 97.07 to 98.17 in the space of an hour. The ease with which BABA obliterated the midpoint support means the stock will now head down to at least 94.26 before it tries to turn around. You can bottom-fish there any way you please, but a stop-loss no wider than 94.14 is suggested.

AAPL – Apple Computer (Last:105.98)

– Posted in: Current Touts Free Rick's Picks

We shouldn't doubt that Apple will eventually lift off for points north -- most immediately the 116.92 midpoint Hidden Pivot shown, and thence its 'D' sibling at 129.20. In the meantime, the presumptive consolidation near 110 has brough only tedium and a more or less predictable series of false starts. The timing of the rally is of some importance, since the stock market as a whole cannot get in bullish gear without the world's most valuable stock leading the charge.  For our part, let's get our feet wet with a 0.31 bid for 16 Feb 20 130 calls, day order, contingent on the stock trading 109.00 or higher. If Apple falls below that price lower the bid to 0.26.  Our eventual goal will be to leg into some vertical spreads for cheap, or possibly free. ______ UPDATE: The calls traded for 0.31 on the opening, so I'll track 16 of them at that price.  Use a stop-loss at 0.24 for now, o-c-o with an order to short 16 Feb 20 135 calls for 0.31. ________UPDATE (January 18, 7:03 p.m.): The stock has looked like hell lately, stopping us out of the calls for 0.24 on the opening Friday. The loss would have totaled $112 plus commissions.  We'll back away for now, since AAPL now looks primed to fall to 103.58 before bulls get traction. ______ UPDATE (January 25, 11:04 p.m.):  The stock has reversed sharply to the upside, putting the 129.20 rally target flagged above solidly in play.

ESH15 – March E-Mini S&P (Last:2016.00)

– Posted in: Current Touts Free Rick's Picks

The last three days have seen bull-trap highs occur on or before the opening bell. Do we detect morons at play here?  Actually, it's probably just the same old dirtballs, marking time until they can get a more potent short-squeeze going. It's hard to say why they've been having such difficulty with this, since squeezing gratuitous rallies from brain-dead bears has been their modus operandi for nearly six years.  From our perspective, a still-outstanding Hidden Pivot target at 2105.00 is the number to beat -- or at least achieve.  In the meantime, day-trading this vehicle will be akin to sitting in on a poker game where you know all the other players are cheats and thieves.  We can beat them anyway, but it's probably not worth the effort.