Wednesday, August 5, 2009

Aug. 5, 2009 Tutorial: Foraging on a Down Day

– Posted in: Tutorials

Stocks were suffering their first setback in a while today, and gold was down too. Even so, the latter looked like a good bet to forge higher in the weeks ahead and to achieve a minimum $1016, a Hidden Pivot target that we were able to identify on the daily chart. Regarding the broad averages, even a cursory look at the E-Mini S&Ps’ hourly chart revealed potentially serious damage. Although the forecast remains bullish, we found reasons to monitor the ES hourly chart closely, since price action at the C-D midpoint of this correction could be revealing.

SLW – Silver Wheaton (Last: 10.28)

– Posted in: Rick's Picks

Our calendar spread will make us shorter if SLW is above $10 at expiration, since the August 10 calls we are short, currently trading with a delta value of 60, will be at 100 deltas. Accordingly, I am recommending that for every four calendar spreads held, you buy two September 7.5 calls (SLWIU) for 2.75/2.80 before the close. They are currently offered at 2.80.

Top Ten Clunkers

– Posted in: Rick's Picks

The Top Ten Cash for Clunkers Trade-Ins: 1. 1998 Ford Explorer 2. 1997 Ford Explorer 3. 1996 Ford Explorer 4. 1999 Ford Explorer 5. Jeep Grand Cherokee 6. Jeep Cherokee 7. 1995 Ford Explorer 8. 1994 Ford Explorer 9. 1997 Ford Windstar 10. 1999 Dodge Caravan The Top Ten Cash for Clunkers New Cars: 1. Ford Focus 2. Honda Civic 3. Toyota Corolla 4. Toyota Prius 5. Ford Escape 6. Toyota Camry 7. Dodge Caliber 8. Hyundai Elantra 9. Honda Fit 10. Chevy Cobalt

$DXY – Dollar Index (Last: 77.71)

– Posted in: Free

The 76.59 target given here yesterday remains my minimum downside objective and a logical place for a corrective bounce to occur.  However, if 77.86 is exceeded first on a rally, that would turn the short-term picture significantly brighter, warning shorts to get 'em in.

DIA – Diamonds (Last:93.33)

– Posted in: Current Touts Free Rick's Picks

A Hidden Pivot resistance at _____ is equivalent to the target given for the cash Dow in today's Side Bets. I'll suggest buying two September 91 puts (DAVUM), good through Thursday, if and when the stock reaches the target.  The options would be attractively priced at around ____ if you want to park a limit order with your broker, but be prepared in any case to stop yourself out if DIA trades above _____. I've included a snapshot of my option calculator, into which I've plugged a 23 volatility that I interpolated from Tradestation.

GCZ09 – Comex December Gold (Last:968.70)

– Posted in: Current Touts Free Rick's Picks

Gold extended a five-day rally to surpass a second peak on the daily chart. This is unmistakably bullish and makes a push to $1000 over the near term very likely, even if it's not the rally that will take prices into the promised land.  My gut feeling is that new peak exceeded yesterday -- 968.90, recorded on June 10 -- should have been breached a day earlier if this bull cycle were destined for greatness. In any event, a move up to at least _____ now appears all but certain. The target is show in the accompanying chart, and, as always, if it's easily exceeded we should infer that still higher prices are likely -- in this case, a minimum _____.   

ESU09 – E-Mini S&P (Last:1004.75)

– Posted in: Current Touts Free Rick's Picks

Yesterday's rally, tired as it was, surpassed our 1002.00 benchmark nonetheless, and with it an obscure November peak whose breach could refuel bulls for yet more weeks or even months. The ____ rally target of two minor patterns is still valid, but it will be less enticing as a place to go short than if it had been hit the first time around.  A _____ stop-loss is advised once again if you take the trade, but don't if you are not confident that you can exit it nimbly if it goes against you.

FREE Impulse Leg Toolkit

Use this simple tool to spot major trend changes the instant they begin.

No, I'm not Interested