Precise forecasting does not necessarily make for successful trading, as the two examples, both from Friday’s Rick’s Picks, make clear.  In the first instance, we used price action in the Bond futures Thursday night to project a tradable low at 105^19. Here’s the way the recommendation appeared in the newsletter:  “Here's a night owl special that seeks to leverage a delicate looking Hidden Pivot support at 105^19 that looks like it could get hit overnight. Bid there for a single contract, stop 105^17, good till 8 am ET. You'll be on your own thereafter, but a trailing stop is advised if the trade goes 8-9 ticks into the black.”

(Click on charts to enlarge)

As the chart above shows, the bonds made an important low just two ticks beneath our target, then trampolined higher. Unfortunately, we’d allowed only a 2-point stop-loss, so we got shaken out of the trade on the low tick of the day.

Exactly 119 Points

The second recommendation was based on a prediction sent out early Thursday evening that the Dow would rally exactly 119 points on Friday. Here’s the actual Tout as it appeared in the newsletter:  “A very unintuitive ABC pattern suggests the futures will run up to exactly 13807 today if the bulls take charge. You can short there with a four-tick stop, but I wouldn't advise doing so in the final hour, nor would I carry the position over the weekend. Switch to a 10-point trailing stop on a pullback that touches 13785, and use 13767 as a minimum objective.”

Now, look at what happened.  In the chart below we see that the futures rallied exactly 120 points, to 13808, allowing us to get short a single tick below a promising high. A ten-point drop followed, but then a last-gasp rally took the September contract up to 13813, six ticks above our stop, where it made its intraday high before dropping back 62 points. 

In each case the forecast was quite accurate but the stop-loss too tight. Could you have done better than I with these numbers? I expect so. Like many of my subscribers, however, I am constantly learning, and adjusting my trading style as the markets themselves change. Although I have come to expect the Hidden Pivot system to yield targets that are extremely accurate and reliable, days like Friday suggest that no system can achieve perfection all the time.

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Terrorists Strike Gold

The war between Hamas and Fatah in Gaza has been covered as a local shoot-'em-up by the network bozos and the mainstream press. However, Hamas' apparent victory holds grave consequences for the Western world, as this report from www.debaka.com makes clear:

   
"The Fatah-led general intelligence and security services caved in too fast to shred, wipe or burn documents, computer disks and archives. The entire collection fell into Hamas’ hands when they seized Palestinian Preventive Intelligence HQ at Tel Awa (henceforth Tel al-Islam) and the Palestinian General Intelligence center near Gaza port. DEBKAfile’s intelligence sources say: Never before has a bonanza of Western intelligence secrets on this scale ever reached an implacably hostile Islamist terrorist gang. The US, British and Israeli intelligence services may have suffered their greatest debacle in the war on Islamist terror. It will take them many years to recover.

Double Agents Exposed

"Hamas has taken possession of hundreds of thousands of documents cataloguing the clandestine operations of Western intelligence services in the Middle East, including Saudi Arabia and the oil emirates. It is now the owner of complete archives of Palestinian undercover links with foreign intelligence services going back decades, with names of spies, political collaborators and double agents. The documentation covers the secret ties Palestinian intelligence maintained from the 1970s, when Yasser Arafat was based in Lebanon, with the Americans, the British, the French, the Israelis and many others.

"Most intelligence experts say Israel should have bombed the two buildings and destroyed their contents rather than letting them fall into the hands of an organization and country dedicated to its eclipse. For Hamas, this booty is priceless – and not only as the repository of bombs for planting under Mahmoud Abbas and his cohorts. The Palestinian group’s Syrian and Iranian sponsors will pay a king’s ransom for this unique collection of explosive secrets hidden by many a Western intelligence agency and government. Damascus and Tehran will be hugely empowered with the means to stay a jump ahead of American moves in the region and tools to sabotage US policies at any time.

'Crown Jewels' of Spy World

They will have a store of national secrets and compromising information to hold over the heads of Western leaders and officials, lists of undercover agents, and records of covert operations carried out by the Israeli Mossad, Shin Bet and Military Intelligence, CIA, British MI6 and other Western agencies. Iran, Syria and Hamas will know the names of politicians, including Israelis, who worked secretly with Palestinians and their shady deals. One intelligence expert said that the Gaza hoard left in enemy hands by Abbas and Mohammed Dahlan are the crown jewels compared with the Saddam Hussein’s intelligence archives.

"In the Palestinian security service building, Hamas found computer hard disks covering years of undercover activity and a complete set of sophisticated wiretapping and surveillance equipment and sensors which the CIA and MI6 gave Mahmoud Abbas and his forces. It was all in perfect condition ready to switch on.  After the Nazi regime was defeated at the end of World War II and Eastern Germany fell in the 1990s, there were officials willing to make a desperate effort to destroy or hide their intelligence treasure. Palestinian intelligence officers did not burn a single page.