Tuesday, January 27, 2015

Bears Still the Buyers

– Posted in: Free Rick's Picks

Shorts remain on the ropes, although their buying power is likely to diminish significantly if they cannot be squeezed today above Friday's highs. With index futures in a very shallow pullback Monday night, however, my guess is that bears will capitulate, even if the blizzard on the East Coast mutes the effect.

SIH15 – March Silver (Last:17.865)

– Posted in: Current Touts Free Rick's Picks

Silver is taking a well-earned breather after ascending from 15.51 to 18.50 in the first three weeks of January. This amounts to a 20% rally, and although it was punctuated by a couple of stalls, buyers at least kept plugging along in the right direction. There was unfinished business at the end of their trek, however, in the form of an unachieved target at 18.755 (see inset). This is not necessarily fatal, but it is sufficient to raise a yellow flag. We'll monitor the pullback closely, looking for signs of incipient strength.  Most immediately, it would be evident in a rebound from the p midpoint support of the pattern shown.

GCG15 – February Gold (Last:1292.30)

– Posted in: Current Touts Rick's Picks

The futures look to be tortuously on their way down to at least 1264.00, although bulls could take encouragement from any impulsive rally that begins from somewhere above that price.  The most logical place for a 'premature' rally to commence would be at either 1274.60 or 1269.50, respectively the midpoint Hidden Pivot and the D target of the small downtrending pattern displayed at the rightmost edge of the chart. Stops as tight as three ticks could be used to bottom-fish at either number. _______ UPDATE (11:08 a.m.):  Posted in chat room 80 minutes ago: "The good news is that Feb Gold has gone bullishly impulsive on the hourly chart without having reached a correction target. What troubles me is that the rally is so feeble on a day where it stood to pick up power from the collapse of the broad averages. On balance, bulls get the benefit of the doubt, simply because of that nice impulsive leg (which is still developing).

ESH15 – March E-Mini S&P (Last:2052.75)

– Posted in: Current Touts Rick's Picks

The 15-minute chart (see inset) suggests the futures will have difficulty avoiding a run-up today to 2068.75, the modest target of a rally begun last Thursday via an impulsive rally from 2019.25.  There's a very minor Hidden Pivot resistance along the way at 2062.50, but its close proximity to Friday's tired peaks makes it less than opportune for getting short. Officially I'll recommend shorting two contracts at 2068.75, stop 2070.25, but only if you've been long for at least five points of the implied ride up. The easiest way to get long, although certainly not the least risky, would be to buy a pullback to the midpoint pivot at 2047.25 and tie the position to a stop-loss a 2040.00. The implied entry risk would be a third of what you stand to gain if the futures eventually reach the 2068.75 target. ______ UPDATE (9:32 a.m.): Weak earnings from some major companies -- of all things! -- have caused the Dow to open nearly 300 points lower. This has aborted the E-Mini's seemingly in-the-bag rally to 2068.75 and generated a short-term bearish target at 2018.00. If you took the mechanical entry at 2047.25, the loss would have been $350 per contract.  Keep in mind that using 'camouflage' to get long would have pared the entry loss to a few ticks or even have produced a gain, since the futures rallied 5.25 points off an interim low at 2048.50.