June 2014

In retrospect, the 169.64 target noted a while back was a good place for bears to lay 'em out, since DIA has yet to exceed 169.58, the all-time high. Now, however, we'll be looking to get slightly short, effectively straddling the bullish bet we made Tuesday in AMZN.  Accordingly, if you hold calls in AMZN, you should try to buy 166-strike puts expiring on July 3 for 0.42 or better.  I would suggest putting a bid in at the price on the opening only, since it would probably get filled if the broad averages open with a weak rally.  If not, I'll update guidance in the chat room.  Remember, this play is only for those who are long in AMZN. (Note: We tried to buy the puts on the close with DIA in a very slight bounce, but the clock ran out on us.)  _______ UPDATE (June 26, 12:12 p.m.): Subscribers reported buying July 3 puts at the 166 strike for as little as 0.33, but I'll track two @ 0.40 to allow for less-opportune fills. In straddle fashion, they go against call options acquired in AMZN.  One side of the position or the other could produce a nice profit, but only if stocks get a little wild over the next 2-3 days.

Nearly everything we trade or monitor reversed sharply yesterday, although gold futures fared somewhat better.  The August contract settled at 1321.30, up $3.00 on the day, after trading as high as 1326.60 earlier.  What might this portend, technically speaking? Actually, the weak selloff could be seen as constructive, since it added an unthreatening bar to a shallow consolidation pattern that has traced out over the last three days. We were particularly bullish coming in, since an ETF vehicle that traders use to effectively go short in gold had just broken down. It symbol is GLL, and because it looks like it has quite a fall ahead of it, the implication is that gold itself is about to embark on a sustained rally. We can only hope this doesn't occur because geopolitical tensions have taken a turn for the worse, since the threats to world peace that already exist, such as they are, are potentially catastrophic. In any event, traders eager to ride the next upthrust in bullion should do their buying following the retracement of any small rally that has surpassed at least two prior peaks on the chart shown. I've sketched this hypothetically (see inset), and it is what we refer to a 'camouflage' trade, which is intended to reduce entry risk to a minimum. If you're interested in how it's done, click here for information concerning the upcoming Hidden Pivot Webinar.  _______ UPDATE (11:45 p.m.): A wicked but fleeting downdraft Tuesday night has taken this vehicle down to a so-far low of 1305.40, equating to a $16 drop. My hunch is that a second leg will follow tonight, so I've changed the chart to one that may be useful for night owls to bottom-fish, or for technicians to assess the likelihood of more damage.  We can usually gauge

I was only half-kidding in the Rick's Picks chat room when I raised the possibility that Tuesday's fleeting high could prove to be the last gasp of the bull market begun in 2009.  If so, considering the egregious financial excesses that produced it, our children, their children and even their children's children might not live to see it exceeded. One reason I suspect it could be a top of at least intermediate importance is that the E-Mini S&Ps came within two points of achieving an important rally target at 1962.50 that I'd 'whispered' in that chat room a while back so as not to jinx it. Naturally, I was waiting to squeeze the last millimeter of upside from the move before shorting it, and so the decline from just shy of the target caught me with my pants down and shoes untied. Caught more than a few others, too, judging from the punitive slope of the selloff that ensued.  We'll know first thing Wednesday morning how hard bulls have prayed overnight for a bounce that they can sell, since, if there's a God, there's no prayer He so delights in ignoring as that one. Technically speaking, and as someone noted in the chat room, when stocks rally above the previous day's high and then close beneath that day's low, it usually means the downtrend will continue for at least a few days. Janet Yellen could conceivably say something to change the outcome, but our view is that the economic world would be much better off if everyone simply tuned her out -- better yet, drove a stake through her heart.

Amazon tripped a buy signal on the daily chart last Wednesday, but the stock looked liked it needed more consolidation before embarking on a follow-through leg resembling the steep one traced out earlier this month. Now buyers are just shy of tripping a second buy signal that could serve our goal of getting long with relatively little risk.  The entry trigger lies at 329.64, but I'll hold off on providing detailed instructions, since I'd prefer to use camouflage and call options to get aboard. For timely guidance, stay tuned to the chat room today. ______ UPDATE (6:59 p.m.): Based on a signal disseminated in the chat room intraday, subscribers bought four 350-strike calls that expire on July 3 for an average of around 0.47.  AMZN's subsequent plunge cut them by a third, but our reason for buying them -- a rally target just above $350 that looked like a good bet to be reached before Independence Day -- remains intact.  While a fall below 320.41 would invalidate the target itself, the bigger picture will remain bullish down to 290.37. _______ UPDATE (June 26, 12:02 a.m. ET): Yesterday's action was constructive, but AMZN will have to catch fire to warm up our call options and reach the 357.30 target shown by next Friday. We hold them as an effective straddle against puts in DIA. _______ UPDATE (9:26 p.m. EDT): Thursday's dipsy-doodle price action sucked the air out of expiring weekly options, although ours will still have a fighting chance if AMZN can get off the launcher today. _______ UPDATE (June 30, 1:45 a.m. ET):  AMZN manifestly did NOT get off the launcher Friday, rendering half of our straddle brain-dead. We still have a horse in the race, however, by way of the DIA 166 puts we hold.

GLL, an ultrashort ETF bet on gold, has broken down, implying that bullion prices are about to head higher.  The move could be quite significant, since the downside Hidden Pivot target for GLL is well below current levels. For further details, check out today's tout and the accompanying chart.

The recent breakdown below an 84.67 midpoint Hidden Pivot is bullish for gold, since GLL tracks the metal's price inversely.  We haven't used this logic before, but the conclusion seems logical and is somewhat corroborated by an apparent consolidation pattern in gold futures.  The further implication is that the next leg up in gold will be quite substantial.

Sunday night's head-fake brought the futures close to two shortable Hidden Pivots -- one major, the other minor -- but I resisted the temptation because of the old adage that one should never short quiet tape. That and the timidity of yesterday's selling argued for waiting for a better opportunity. For further details, including a recapitulation of the precise rally targets, check out my 13:14 post in the chat room.  More immediately, night owls can try getting long at the 1948.25 target shown.

Use these tips for day trading stocks with greater success [Day traders have been abandoning the game in droves because it supposedly has become too rigged to beat. In fact, the markets have always been rigged, and it’s never been an easy way to make a living. Yes, thinking machines programmed mostly by nerds who know little about the psychology of trading have added a new layer of complexity. But the nerds are hardly unbeatable. Below is the advice we gave traders in a column that originally appeared in the Sunday San Francisco Examiner.  It has been modified to suit the times, but the advice still applies. RA] The late John Scarne, legendary card manipulator and gaming wizard, used to tell a story about how he and his pal, heavyweight boxer Jim Braddock, walked into a crooked card game and won a pile of money. Knowing that they were being cheated put Scarne on his guard, and he lost no time taking countermeasures to ensure his and Braddock's great success that evening. Whenever it was Scarne's turn to deal he went to work, peeling useful cards from the bottom and even the middle of the deck.  At one point, in full view of all, he surreptitiously stacked the cards while shuffling them, allowing him to deal Braddock a hand that beat a tableful of exceptionally good hands. Scarne surely would have feasted if he'd lived long enough to day trade and play the stock market today, since the game has come to be increasingly dominated by thimble-riggers and keister bandits who would not think twice about bankrupting some widow or stealing from an orphan's college fund. With stocks pushed ever higher by a tide of virtual money from the central bank, Wall Street's wolves have set upon an unwary flock

Night owls should use the 1967.00 target shown as a lodestone for any buying done Sunday.  If you happen to be long if and when it's reached, use a portion of your gains to cushion a stop-loss for a short initiated there.  'Camouflage' is the preferred entry tactic, but if you want to shoot from the hip, try shorting the pivot with a 1968.25 stop-loss.