ARCHIVED COMMENTARY
Nostalgic for
Easy Money
For edition of August 28, 2006
I’ve been around professional traders for nearly thirty years, but I can’t recall ever hearing a one of them remark that it was particularly easy to make money at the time. It is only in retrospect that we wax nostalgic over the relative felicitousness of the markets at various times in the past. There was 1974, for instance, a year after listed options began to trade on the CBOE. Back then, any floor trader who could tally a bunch of nines would have understood that the ability to put on butterfly spreads for a net credit amounted to a license to print money. This was because put and call premium levels were so amazingly juicy in 1974 that sellers of options almost could not lose. With retail customers locked into the opposite strategy by regulators obsessed with risk, market makers were like piranhas living on a salmon farm.
Similar good fortune would have come to those who pioneered the use of certain technical tools, such as stochastics, Bollinger Bands, relative strength oscillators and Gann lines. Nowadays, though, the most sophisticated technical tools you could ask for are routinely bundled into trading platforms used by millions. The result is that few of the old technical tricks work, at least not for any length of time, and not when they are turned loose on each other in such ambitious profusion.
(Click on chart to enlarge)
Even my own little trick, Hidden Pivots, sometimes succumbs these days to tedium that would test the most patient trader’s mettle. The action in Citi, charted above, is a case in point. We see a promising AB impulse leg two weeks ago that implied the rally would end with a finishing stroke to exactly 49.41, an unmistakable Hidden Pivot.. While I don’t doubt that this will occur – Hidden Pivots are not chopped liver, after all – the more important consideration is that it will have taken the stock more than two weeks to effect this very modest follow-through. Amortized over the entire period, and unadjusted for opening-hour risk, our theoretical daily profit would amount to no more than about seven cents per round lot, not including commissions. From these details it should be clear why we would much rather short the shares of Citigroup -- a deflation catastrophe waiting to happen -- at 49.41 than go with the flow.
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NYC Seats Going Fast!
Remaining seats are going fast for this once-in-the-decade event, slated for October 14-15 in a conference facility off Central Park West. If you would like me to reserve a place for you please let me know by requesting a registration form at this link. Meanwhile, here’s a FAQ to speed the decision along:
Seminar FAQ
When will the Hidden Pivot Seminar be held?
There are four seminars scheduled over the next four months, all on weekends. The first will be in New York City on October 14-15; the second, in Vancouver on October 28-29; the third, in San Francisco on November 11-12; and the last, in Sydney on December 2-3.
The class takes two full days, then?
Yes, from 8:30 a.m. to 5:00 p.m. on Saturday and Sunday. After an on-site brunch the second day, the remaining hours will be devoted to an informal Q&A session.
Can I take the course online?
We do not offer an online seminar at this time, but this may change if demand warrants it.
Is the seminar open to those who do not subscribe to your Rick’s Picks advisory service?
The course is open to subscribers and non-subscribers alike. However, I encourage all seminar students to subscribe to Rick’s Picks, if only for a month or two, so that they can become familiar with my methods and trading style. Also, the archives and educational pages offer a useful resource for learning about my proprietary methods prior to the seminar.
How can I sign up for the seminar?
You can request a registration form by clicking on the blue hypertext line under “Last Call!” above.
How much does the seminar cost?
Tuition for the two-day event is $1,500, This covers course materials and extensive post-grad mentoring in a real-time chat-room held during market hours.
When is the money due?
A deposit of $300 is due with the registration form. $100 of it would be non-refundable, and the remaining $200 would become non-refundable six weeks prior to the session.
How about the remaining balance of $1,200?
It would be payable by two weeks prior to the session and would be refundable. A check is preferred, but you will be able to use a credit card for an additional administrative fee of $50.
What will I learn?
The goal of the course is to enable students to master the Hidden Pivot method and to use it to forecast price reversals at least as accurately as experts who do it for a living. In addition, you will learn to use some basic risk management strategies and to leverage swing points with puts and calls. If you’re interested in what my subscribers have said about hidden pivots, click here.
Can someone who knows little about trading or technical analysis benefit from the seminar?
Although many professionals have taken the course, it is an ideal place for the novice to start, since it offers a relatively simple, stand-alone method of forecasting and trading. No prior trading experience or knowledge is required.
