The hourly charts continue to hold the key these days to “phenomenally accurate forecasts.” For example, after predicting a 30-point drop in the E-mini S&P futures a few days earlier, we used the 60-minute chart to catch the low of yesterday’s trampoline bounce within a single tick (i.e., a quarter-point). Here is the recommendation exactly as it went out to Rick’s Picks subscribers over the weekend. The December contract had settled on Friday at 1468.00:

“The 1464.00 downside target broached here last week remains valid, but if it's exceeded by more than a point, look for the downtrend to reach a minimum 1435.75 before exhausting itself. We'll plan on bottom-fishing 1435.75 with a 1.00-point stop-loss, provided it is reached by Wednesday. The enticingly devious pattern that yielded that target is shown in the accompanying chart.”

(Click on chart to enlarge)

Now, using a 1.00-point stop-loss to try and catch the low of a 30-point plunge may sound like anal-retentive risk control, but in this case our micro-stop was more than adequate, since the futures traded no lower than 1435.50 before embarking on their quite powerful rally. (See chart above).  But the icing on the cake was the  equally powerful thrust in the Dow Industrials. Using the same “enticingly devious pattern” that had allowed us to nail the exact low in the mini-S&P, we were able to calculate an equally precise Hidden Pivot target for the mini-Dow: 13093.  The actual low was just three points from that number, and it turned out to be the launching pad for a 187-point rally.

In Google, a third Rick’s Picks trade recommendation yesterday caught a tradable low with the stock in the midst of a $25 freefall. The 657.92 target we’d furnished would have allowed one to get long the stock on the way down with a stop-loss as tight as 24 cents. This one proved to be for experts only, though, since the $4 bounce off our target lasted for all of five minutes. Still, the price action demonstrated that Google even at its wildest is not so ornery and unpredictable that it cannot traded with stop-losses as tight as a quarter of a point. 

All of these Hidden Pivot trades were analyzed during a free Webex demonstration that was held during market hours for non-subscribers. If you would like to be notified of the next such session, simply drop us a line by clicking here.