June 2009

For a two-week period beginning Monday (6/8) @ 9AM EDT, we’ll be looking to start the day armed with enough Hidden Pivots to tame and otherwise demystify the opening, especially in Gold and the E-Mini S&P.  This is an offer you can tell your friends about, since the Morning Briefing will be open to all.  If you don’t subscribe to Rick’s Picks, you can still sign up for the briefings by using a link embedded in the commentary I mail out free each morning.  Click here to signup to receive the Morning Briefing links and my daily commentary.

Akamai's rally is approaching the point where we might soon be able to spread off the risk of the four August 25 calls we bought a while back for 0.90. Let's offer four August 27 calls short for 0.95, good till canceled. If the order fills, we will have legged on a $2 vertical bull spread for a small credit. It will give us a position with no possible loss, a minimum gain of $20, and a maximum gain of $800 with the stock trading above 27 come August expiration. My guess is that AKAM will have to reach $24 (or so) to fill our short offer at 0.95 by mid-June.

For a two-week period beginning Monday, we'll be looking to start the day armed with enough Hidden Pivots to tame and otherwise demystify the opening, especially in Gold and the E-Mini S&P.  This is an offer you can tell your friends about, since the Morning Briefing will be open to all.  If you don't subscriber to Rick's Picks, you can still sign up for the briefings by using a link embedded in the commentary I mail out free each morning.  Click here to signup to receive the Morning Briefing links and my daily commentary.

The jury's still out on the 69.38 target we've been using as a minimum upside objective.  Buyers' strenuous efforts took the futures to a new recovery high at 69.60 yesterday, just 22 cents above our target. That's a tolerable margin of error for crude futures, as those of you who used a 26-cent stop-loss trying to short the last peak are bound to know. The futures were head-butting the pivot in night action, threatening to bull their way up to as high as _____ on the next leg of the short-squeeze.

The Rick’s Picks chat room was abuzz yesterday with anxious talk about a possible $100 swoon in gold over the very near term. Fears may have been stoked by a subscriber whose predictions have been prescient. Indeed, this fellow foresaw $60 crude when it was falling into the low $30s, and he was more bullish on stocks at their last bottom than just about anyone else we know. Now, although his long-term outlook for gold is quite bullish, though no moreso than our own, he’s looking for a sharp pullback as the summer begins. We don’t see it and are instead looking for an immediate push to $1008, basis Comex August, with a follow-through that carries to at least $1066. It is from those height that Gold could stall, according to our runes, but the odds are just as good that the rally could keep chugging all the way into the low $1200s before taking a serious rest. In any event, it’s plain to see that bullion hasn’t been paying bears much mind lately. The rally from mid-April’s lows is now in its seventh week, and buyers have been noticeably unintimidated on the few days when the U.S. dollar was strong. A possible reason for gold’s steady but unspectacular climb occurred to us as while we were reading letters to the editor in Tuesday’s edition of The Wall Street Journal. A few of them took pot shots at an op-ed piece, “Why Beijing Wants a Strong Dollar”. We find nothing exceptionable about the premise of the headline, although the letter writers’ consensus was that the U.S. shouldn’t rely too heavily on continued fiscal support from the Chinese government. We agreed in particular with one of them when he wrote as follows: “Simply because the Chinese currently have a portfolio consisting

We've been using _____ as a potential stumbling block for the Mother of All Short Squeezes, but if you look at the accompanying chart, you'll see that ____, a Hidden Pivot derived from a lower point 'A' than the _____ target,  is just as compelling. Keep in mind that it costs us nothing to over-estimate the rally's power, since, if it winds up falling short of our objective, the failure will be telegraphed from the get-go on the lesser charts.

We're long the September 10-June 10 calendar spread four times for a 0.10 CREDIT,  and we also hold four July 12.50 calls bought more recently for 0.30. Our intention was to spread off the latter, so let's try it today by offering four June 12.50 calls for 0.20, day order.  The spread could widen to as much as 1.00 at expiration, implying that our risk:reward would approach 1:10.  Would you lay 10:1 that Silver Wheaton won't rally another 1.60 over the next two weeks?  We'll have the other side of that bet if we get the short sale off. (Note: As of yesterday's close, the stock looked like it could conceivably pop to 11.56 before the week ends.)

In after-hours trading, the futures were adding to the implied potency of the day's rally, pushing for the first time above a small but technically significant peak made on the way down Wednesday. The breach was by just two ticks, but that is enough to set up a potential camouflage entry opportunity whose details weree still firming as of 7:43 p.m. EDT.  I have indicated in the accompanying chart how the opportunity could play out, and I would encourage experienced pivoteers in the chat room to share the entry tactic once its details are complete. _______ UPDATE: Moments after I prepared this tout (and chart), the futures downticked, all but negating the entry opportunity noted above.  Even so, it has not negated the implication of real strength percolating quietly beneath  the surface.

Testing. Please ignore.