November 2012

The narrow failure of Friday's histrionical upthrusts to exceed an external peak (well to the left at 1739.70, on 10/19) is warning of a possible stall.  To negate the implication of short-term weakness it, let's stipulate that the futures exceed that peak today, along with another 'external' slightly above it at 1740.30.  Following a two-day close above it, the December contract would become an odds-on bet to test supply near 1754, presumably enroute to $1800.

We hold 12 March 30 calls bought for 0.50. Bid 0.25 for 12 more calls on the opening, but reduce it to 0.20, day order, if you're not filled within 10 minutes. My gut feeling is that the selloff from October 24's bull-trap opening is as overdone as the bull-trap short-squeeze was, having reduced the stock's price by 25%.  Concerning the short-term picture, at this point 'structural' supports at 18.80 (10/19) and 17.55 (9/4) will probably be more useful than Hidden Pivots in assessing the likely extent of any further weakness. ______ UPDATE (8:11 p.m. EST):  Traders were advised to buy 12 more calls for 0.25, and now our cost basis is 0.38 for the bunch. Thereafter, the stock lifted off structural support that lay outside the realm of Hidden Pivotry.  The rally projects to 20.86 (15m, A=18.87, B=19.97, C=19.76; see inset), subject to midpoint resistance at 20.31. If that pivot is easily exceeded, 20.86 should be in-the-bag. Meanwhile, ya gotta like the way the stock pushed easily past a bunch of minor 'externals'. _______ UPDATE (November 14, 10:00 p.m. EST): With the broad averages cascading yesterday, Silver Wheaton was a pleasurable anomaly -- up more than 12% in the space of just a few hours. It is making further headway in after-hours trading, suggesting that DaBoyz know something we didn't even need to know when we jumped on the March 30 calls. Since we shouldn't look this gift horse in the mouth, and because rare is the day when holders of call premium experience more than two or three consecutive days of anything approaching delight, I'll recommend offering 24 March 33 calls short for 0.50, good-till-canceled. I'll let you work the numbers just so you can see how lovely it will be for us if we can lock in

Via a tracking position,we hold a round lot acquired effectively for $636.  This imputes to our position $1899 in profits realized by traders who took partial gains on an initial purchase of 400 shares where I'd suggested on Friday:  near 656 on 200 shares; and at 659.00 on another 100 shares. For now, I'll suggest using an impulse-leg stop-loss derived from the 15-minute chart. Based on the pattern shown, this would imply exiting on an unpaused drop that exceeds the internal and external lows shown, the lower of which lies at 650.15. This by-the-book stop is relatively tight, considering the theoretical gain we've racked up so far.  If you prefer, you can widen it to suit your taste.  Using the hourly-chart, and impulse-leg stop would trigger on a print beneath a 636.13 low recorded on August 10.  _______ UPDATE (November 20, 8:16 p.m. EST): If you've been using the 15-minute chart to create an impulsive stop, yesterday's bull trap would have popped you out of the position at 666.48 (see inset), yielding a gain over three days of about $3000.   If you are instead holding to an impulsive stop-loss on the hourly chart, the position is still live and your assumed to be swinging for the fence.

For your guidance, I've established a tracking position that leaves us short a single contract with an effective cost basis of 1470.00. To manage risk dynamically, I've suggested an impulse-leg stop-loss that would trigger at 1397.75, based on the pattern shown.  Keep in mind that the upthrust would need to surpass both peaks shown without a 'b-c' correction, but you should exit in any case if the rally exceeds peak #3.

The 12742 target of the pattern shown looks like it will be worth bottom-fishing, even though the point B low is sausage. Its equivalent on DIA's chart is 126.95, and so I'll suggest buying four DIA December 128 monthly calls near there, stop 126.79. _______ UPDATE (November 12, 12:20 a.m. EST): Although the DJIA cash index bottomed at 12743, just one point from where I'd predicted, DIA's 127.28 intraday low did not follow precisely.  Under the circumstances, I'll assume nothing done on the order.

Gold's encouraging bounce from Monday's 1672.50 low projects to 1763.50, a number that became an odds-on bet with yesterday's push past the 1733.30 midpoint resistance by nearly $2.  A larger pattern shown in the same chart (see inset) projects to 1823.50, and it too would be solidly in play if the futures can close above the 1748.00 midpoint for two consecutive days. Bulls' most urgent concern, however, is the ease with which the futures vault the external peak at 1755.00, assuming they can do it at all. If they muster this feat from current levels with a run-up that is uncorrected on the 480m chart, it would be a very bullish sign.

We are short two contracts with an effective cost basis of 1418.00 after I advised covering near 1380.00 half of a position initiated at 1399.25. This is a tracking position created for the further guidance of traders in the chat room who reported having taken action. For now, plan on covering one contract at 1366.00, just above the 1364.50 downside target I'd advertised as a lead-pipe cinch when the futures were trading around 1392. You should make that order o-c-o with a stop-loss to close out both contracts if there's a bullishly impulsive thrust on the 15-minute chart. What this implies is that the stock must take an uncorrected leap surpassing at least one internal and one external peak. I've labeled two 'externals' in the accompanying chart, but an 'internal' peak could be created near the very bottom of this formation if the futures fall back just a few ticks  beneath their current 1375.75.  The effect of that would be to lower the stop-loss from just above peak #2 (1388.75) to just above peak #1 (1379.50). _______ UPDATE (9:50 a.m. EST):  The futures bottomed at 1363.50 this morning, an hour before the regular session began, and have rallied 11 points since. We are now short one contract on paper, but what the hell do we care about being short, since our cost basis when we impute the theoretical gain of 52 points for the contract covered at 1366.00 is...1470.00. To manage the risk of this single-contract short position, I'll suggest an impulse-leg stop-loss on the 60-minute chart. At the moment, that would require the current rally to remain uncorrected between the 'external' peaks at 1381.75 and 1397.50.  If such a powerful rally occurs, with us on the wrong side of it all the way, it will still leave us with

The Dow plunged 313 points on Wednesday, and another 121 yesterday, but don’t believe news media reports that it was the nearness of the “fiscal cliff” that has caused this selloff. What spooked investors is a bigger picture that recognizes the economically catastrophic implications of a second Obama term.  To be clear, there is nothing Romney could have done to avoid the deflationary Depression that lies ahead.  However, a Romney presidency might have at least served as a reality check, delaying the onslaught of hard times for perhaps long enough to allow Americans to put their financial houses in order before austerity hits with the force of an earthquake, as it has in Europe. We’re not going to dwell on the choice Americans made on Tuesday. Suffice it to say, the election has substantiated conservatives’ worst fear – that, sooner or later, Big Government’s clients would come to outnumber those of us who pay for the criminal extravagances of their voracious welfare state. Actually, it turns out, drones needn’t have outnumbered taxpayers, since the quirks of the electoral college have enabled them to execute a coup even though they lacked a statistically significant majority. Bread and Circuses Now, with a $16+ trillion federal deficit that is growing by more than a trillion dollars per year, the nation’s descent toward insolvency can only accelerate, further widening the gap between tax revenues and outlays. Soaking the rich, even by taxing them at 100%, would not begin to arrest the decline, but just try to tell that to those who voted for Obama. Bread and circuses will be their reward, and far be it from us to predict that they will feel unsatisfied. Rather, the opposite should hold true, since it will not have cost the 47% a dime. As far as the

Hidden Pivots take on a show-biz aura when they work perfectly, as it appears the one in Google might.  However, regardless of whether these targets miss by pennies, dimes or, in rare instances, dollars, their true value lies not in the bullseyes, but in allowing us to get the trend right consistently, and also to get a very reliable read on how far it is likely to continue. In Google's case, a $16 drop yesterday brought the stock to within spitting distance of a 650.69 midpoint pivot.  I've encouraged speculative buying within 20 cents of this number, but it should be with the knowledge that more downside to at least 605.83 awaits if the target is breached by perhaps as little as 25 cents. _______ UPDATE (2:45 p.m. EST): Google bottomed this morning at 650.30, then rallied $18.  Timely trading guidance was disseminated to subscribers via e-mail, in the Touts section of the newsletter and in the chat room.