August 2009

Our bearish position was short-lived, since we scratched September 95 puts acquired a day earlier when the Diamonds hit our stop-loss early in the session. There were two more spots where we could try to intercept -- at 96.00, or _____ -- but they come from an ABC pattern that is starting to look too obvious. Better to get long for the pop to the higher number, assuming it comes. This would perhaps be best accomplished using "camouflage" in the first 15 minutes of Wednesday's session, so I'll make that an assignment for pivoteers who are in the chat room at the time.

A bullish target analogous to the one given for December Gold lies at 15.515, and it should be considered a done deal if the futures can close above its sibling midpoint, 14.505.

If nothing else can stop a runaway stock market, there's always the astrologers. Pick any day of the year, and odds are it's circled in red on some star-gazing guru's End of Days calendar. The higher stocks go, the louder their predictions of disaster. Not that we haven't joined the chorus of despair ourselves from time to time. How else is a guru supposed to gin up business during the dog days of summer? At the moment, the sexiest prediction out there is the Mayan apocalypse slated in 2012.  Perhaps the Mayans would have pushed that date back a few years, giving themselves a little extra room, if they'd known that Goldman Sachs - the antichrist at the moment -- would be running the world. Some of you will already know that the date December 21, 2012, marks the final 24 hours of a Mayan calendar that for thousands of years has been counting down a 5,126-year span. The bookstores have at least a dozen titles on this subject, and it seems to have captured the popular imagination in the same way the Y2K scare did. Mind you, this isn't a cycle that's supposed to begin anew; rather, it is simply the end of time. Assuming December 22, 2012 never arrives, then, do we infer that that will suffice to keep mortgage lenders at bay? Or will they be waiting to dun us as soon as the next Big Bang starts to cool?   Looking on the Bright Side Whatever happens, we shouldn't count too heavily on debt forgiveness, since debt collectors are probably even hardier than cockroaches. But there may be a bright side: Spiritual healer Andrew Smith, for one, thinks 2012 will usher in a "true balance between Divine Feminine and Masculine." If so, at least a couple of

A pop to _____ is possible if buyers dominate, and a close above that Hidden Pivot midpoint would indicate _____.  However, as of early Tuesday evening, the futures had slightly exceeded the 944.90 midpoint support of a down-ABC begun at Monday's high, 985.50. If the pivot gives way, that could be telegraphing more slippage to as low as _____. 

There are numerous bullish patterns at work in various time frames, so perhaps we should expect to see the rally fail near these levels (i.e., around $74).   If crude confounds contrarians and breaks loose, however, there would be little to stop the September contract below 75.58, a Hidden Pivot.  Once above that number the closest logical target would be 78.77. _______ UPDATE (10:50 a.m.):  The futures are falling today, and so we might look for a tradable bounce near 71.26 in the DECEMBER contract. That's a clear Hidden Pivot.

Let's put a stink bid into today at 34.87, for 200 shares. That's a penny above a 'D' correction target on the 5-minute chart.

The Hidden Pivot target at 1034.00 given here yesterday caught a very short-able top within a single point. I recommend partial profit-taking below 1026.00, but I'll track two short contracts for the guidance of anyone who stayed short as I suggested. Imputing the theoretical gain sol far to the contracts that remain gives us a cost basis of 1042.00 for each. Cover one at 1022.00 and use a 1030.00 stop for both, o-c-o (one-cancels-other: this means that if you are unable to buy back the one contract at 1022.00, it should also be tied to the stop at 1030.00). 

The Diamonds and the E-Mini S&Ps followed our script precisely yesterday, allowing Rick's Picks subscribers to get short from the intraday highs in both. Because the E-Minis were raising some hell Sunday night, we allowed for a rally to as high as 1046 on Monday - equivalent to about a 200-point thrust in the Dow Industrials.  However, we saw an opportunity to get short at a lower target, a Hidden Pivot at 1034.00, and put out the following trading recommendation:  "...a lesser target at 1034.00 can be shorted by scalpers with a 1.25-point stop-loss provided it's hit in the first hour and 1020.50 hasn't been exceeded to the downside first." As it happened, the 1034.00 target was hit 57 minutes after the opening bell. The futures didn't fall immediately, and in fact went a point higher, to 1035.00, missing our stop-loss by a single tick. They meandered sideways for the next few hours; then, about midway into the session they dove to 1021.25, yielding a theoretical profit of as much as $637 per contract. In an intraday bulletin, we told subscribers to take partial profits below 1026.00 and to hold onto at least a small piece of the initial position for a possible home run. A similar opportunity played out in the Diamonds, where we told subscribers to look for a shortable top at 95.82. Here is the recommendation exactly as it went out Sunday night:  "Opportunity beckons, since the Diamonds are closing on a Hidden Pivot resistance at 95.82 that looks likely to cause a stall.  Buy two September 95 puts (DAVUQ) if and when the stock gets there. I estimate they'll be selling for around 1.76 if you want to park a limit order with your broker..."  This recommendation could not have worked out more perfectly, since DIA topped

We hold the January-October 130 put spread four times for 3.40 but were unable to buy a round lot of stock yesterday on our terms as a hedge. Let's try another approach today, bidding 3.10 for a single October 175 call, day order.