ARCHIVED COMMENTARY
Free Chat Room
For You Traders
For edition of August 02, 2006
Rick’s Picks will soon offer a real-time trading chat room to paid subscribers at no additional cost. My goal is twofold: 1) to make you tingle with glee every time you write me a check for the pittance (currently $360) that it costs to renew annually; and, 2) to make it easier for me to trade. Concerning the latter, I’ve struggled to concentrate on my own trading while putting out recommendations to subscribers each morning via the Bulletin Launcher. Yesterday, for instance, you and I both were immersed in the trading of two stocks, Google and Citi. We had bought some calendar spreads in GOOG a day earlier that exploded when the stock plunged yesterday by more than $11. Although my intention was to hold onto the position until GOOG fell to the target I’d identified, there was a quick $700 profit to be had by closing out the position after holding it for only a single day. And so we did, but it required quite a bit of verbiage in the middle of my already busy trading day to get out the word. Here is the actual sequence of bulletins, as they appeared in the Intraday Notes section of Rick’s Picks:
(Click on grapic to enlarge)
Although I heard from subscribers who closed out the spread for the recommended $6, I in fact did not; I was too busy exhorting you to act when the spread briefly fetched $6. Of course, a chat room venue would have simplified the task, since I would not have needed to provide such explicit instructions.
Meanwhile, the trade we put on in Citi was much simpler: We bought some September 50 calls for 0.35. But I didn’t learn that I’d bought them myself until 20 minutes after the fact, so busy was I attending to the Intraday Notes section, where I posted an interesting item and chart from economist Paul Kasriel concerning record-high household debt. Anyway, the Citi trade has worked nicely so far, since the calls closed 0.10 above our purchase price. In the parlance of some of my guru colleagues’ powerful marketing machines, that works out to an annualized gain of more than 10,000 percent (!!!!).
Longtime subscribers will already know that Citi is a stock that I love to hate, having predicted here a while back that it will eventually fall to under $10. But yesterday, with the broad averages looking pretty punk, Citi managed to hang tough. Via the Bulletin Launcher I advised as follows: “You’d have to be short Citi, as we are, to notice how stubbornly the little sonofabitch is bucking today’s weakness. This suggests that if and when the broad averages turn around, Citi shares are likely to lead the charge. Accordingly, and somewhat speculatively, I'll recommend bidding 0.35 for ten September 50 calls (CIJ), contingent on C trading 48.20 or higher. If the stock is below that number, lower the bid for the calls to 0.30.”
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San Francisco Seminar
I was scouting locations in San Francisco over the weekend for the upcoming Hidden Pivot Seminar. A specific date has not yet been set, but it now looks like the two-day class will be held in February, 2007. If you’re interested and haven’t contacted me yet, please let me know via-email . Is this seminar for you? Here’s a prospectus so that you can decide for yourself:
Trust Yourself,
Not Some Guru
Would you like to be able to forecast trends and price swings so accurately that you’ll never again have to seek advice from the supposed experts? That is the goal of the Hidden-Pivot Seminar: to teach you to read the markets so confidently that you will come to trust your own judgment over that of gurus who forecast for a living.
My proprietary Hidden-Pivot Method derives from a few simple principles that I’ve developed and honed over the last twelve years. It is the simplest and most powerful method I have ever found for predicting trends and price swings accurately and with complete confidence. Moreover, it works in any time frame and for virtually all types of securities, including stocks, indexes, commodities and options.
Inhale…Exhale
The system is based on the theory that stocks and commodities are constantly trying to balance yin and yang energy as they move around. Their ups and downs are analogous to breathing in and breathing out, and in the end these complementary actions must offset each other precisely. The trick to understanding how the process works in the securities markets is to visually match up trend segments that are part of ABCD patterns on charts.
Consider as an example the chart of eBay below. The key number is 28.89, the presumptive D target of a pattern defined by points A, B and C. The target is what I call a “hidden pivot,” and it is calculated by subtracting the length of the A-B segment (3.90) from point C. In the example, the resulting value is 28.89, a mere two cents from where eBay actually turned. In retrospect, we see that this would have been an excellent spot to buy the stock using a stop-loss as tight as a nickel. It also would have provided a precise target to enable disciplined short-covering.
A Simple Trick
The visual trick to identifying these patterns is really no trick at all. You simply find the B-C leg first, then move backwards to locate A. Those three price points are all you will need to calculate a D target. Note that the B-C leg is simply any countertrend move that looks like it might eventually be the axis of symmetry dividing an AB impulse leg from a CD follow-through leg.
That’s all there is to it. Since the system is based entirely on price action, you won’t ever have to consider trading volume, oscillators, channels, MACDs, trendlines or any of the other conventional indicators that most technicians use. And with just one more trick, you will be capable of forecasting as accurately as those who do it for a living. You need only locate the exact midpoint of the B-C segment’s second leg. Once you are able to find this specially endowed hidden pivot – a simple task for the trained eye – you will never again need an “expert” to tell you what a stock, index or commodity is likely to do next.
The Hidden Pivot Seminar is held over two days, during which time you will learn how to spot the most promising ABCD patterns. You will also learn, in under 20 minutes, a surprisingly easy way to use stochastic indicators and other oscillators to enhance your timing. Finally, you will learn how to use hidden pivots to manage risk so that you will always know exactly when to cut losses and when to let profits run.
Free Mentoring
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An important feature of the seminar, at no extra cost, is post-grad mentoring in a hidden-pivot chat room set up by some of my students. Here is what one of them, Hunter Reynolds, recently had to say: "We have all come a long way. I think everyone here is making a little $$, or we would be doing something else by now. I can honestly say I am up about ten percent, maybe a little more, since your class. I am pretty conservative. I just trade from the long side, but I'm getting really good at picking the hidden-pivot reversal points for the uptrend!"
I should tell you that seminar grads who frequent the chat room are coming to understand my method as well as I do. Indeed, some have adapted what they learned in highly effective ways that I could not have foreseen. Buttressed by the continuing lessons of the chat-room, the Hidden Pivot Seminar offers an opportunity to acquire powerful analytical tools that will serve you for a lifetime.
A Student’s Experience
Here is what one of my grads, Hunter Reynolds, had to say recently about the chat room:
"We have all come a long way. I think everyone here is making a little $$, or we would be doing something else by now. I can honestly say I am up about ten percent, maybe a little more, since your class. I am pretty conservative. I just trade from the long side, but I'm getting really good at picking the hidden-pivot reversal points for the uptrend!"
Dates are not yet firm for a fourth seminar to be held in Sydney, Australia, but it looks like it will take place either in November 2006 or February 2007. The class is filling up, so do let me know soon if you’d like to attend.
