October 2014

If you're going to heed bullish advice, wouldn't you rather it come from a die-hard permabear who hates the market no matter what it's doing? With that in mind, let this permabear note for the record that yesterday's blitzkrieg rally surpassed no fewer than THREE external peaks on the daily chart (see inset), generating the wickedest bullish 'impulse leg' we've seen since February. And there's potentially more;  for if the rally should continue for yet another day or two without correcting, it could conceivably knock off two more peaks, including the all-time high, adding nitroglycerine to the implied power behind it. Meanwhile, a denizen of the Rick's Picks chat room reiterated some advice he left earlier: "I will again state that this market will not drop hard from here until sometime after the midterm elections; I said the same thing in early September and then again in October. When this market drops however, it will fall harder and farther than anyone believes. No graphs, charts, or moon cycles foreshadows this -- just pure politics." Okay, then: A little more giddiness for now, presumably peaking on, or shortly after, November 5, when investors will exhale a huge, collective sigh of relief.  As why should they not, since voters will have utterly repudiated the destructive, ideologically poisoned ideas of the worst President in U.S. history? Obamacare alone has all but clinched this judgment, and the law's exorbitant costs to nearly every American household may ultimately prove to be the catalyst that sends the market into the epic plunge we've long anticipated. From a trading perspective, I would suggest that you continue to follow Rick's Picks' daily updates. Yesterday's E-Mini S&P tout, for one, came within two ticks of nailing the 1956.75 low of what turned out to be a 24-point rally. Here's

Feeling the pain of shorts from day to day by putting yourself in their shoes remains the key to reading stocks accurately. Short-covering bears took the day off yesterday -- but it was, after all, a Monday, and the buying hysteria was going to cool anyway, given that it has been raging since October 17. For trading purposes, I've proffered a rally target in the E-Mini S&Ps that could be helpful to night owls. If stocks get second wind today, though, it's likely to be another tough week for bears.

I first recommended this stock in early September after being very impressed with a presentation by its CEO, Atul Sabharwal. The company provides mobile marketing solutions to a growing list of clients that includes Walmart, ESPN, Lexus, Taco Bell, Target, Johnson & Johnson and Minute Maid.  Snipp's shares are listed on the Toronto Venture Exchange (TSX: SPN) and on the OTC in the U.S. (symbol: SNIPF), but yesterday it filed with the SEC for an exchange listing in the U.S.  From a technical standpoint, SNIPF looks to be basing for a move to as high as 0.4385. First, though, it would need to trip a buy signal at 0.2878, then to clear the 0.3380 midpoint pivot (see inset).  The company continues to win new business at a rapid clip, and that's why I expect the earnings report due out November 15 to be strong. Full disclosure: I hold shares and warrants in this company. _______ UPDATE (November 13, 10:49 a.m. EST): Two days ahead of the earnings report, the stock has taken quite a leap, with an opening bar high today at 0.38 that was 36% above yesterday's close. This means the 0.4385 target flagged above is well in play.  _______ UPDATE (6:49 p.m.): The stock took a leap Thursday back up to the midpoint pivot at 0.3380 associated with the 0.4385 target. Regarding earnings, they will be out later than expected, in line with the Canadian deadline for filing. Stay tuned.  _______ UPDATE (November 17):  Snipp has reported 252% earnings growth for Q3. Click here for the company's latest filing. _______ UPDATE (December 5, 10:13 a.m.): Zounds!  The stock has popped to 0.40, quadrupling in the eight months since I first recommended it. My immediate target is 0.4356, but SNIPF will need some rest if and when it gets

Yesterday's tout nailed the 1966.00 high of a 21-point plunge within a single tick.  Bears shouldn't allow themselves to grow complacent because of yesterday's dearth of short-covering, however, since the broad averages were due for a breather after a five-day wilding spree -- one that could ultimately clear the path for a run-up to new record highs. Index futures seemed to be rolling over yesterday afternoon, presumably preparing to grope their way to a level at which sellers have exhausted themselves. A slightly bullish bias is indicated nonetheless, since a 1963.50 rally target (see inset) remains outstanding. Because of this, a pullback to the midpoint pivot at 1956.25 should be used by night owls as a speculative buying opportunity. _______ UPDATE (1:08 p.m.):  The futures pulled back to an overnight low of 1956.25 before embarking on a 12-point rally.  If you caught the move, please let me know in the chat room so that I can establish tracking guidance.

Bears will have noticed by now that the wicked short squeeze off mid-October's bottom is within striking distance of new record highs. As such, traders should position from the long side, using such Hidden Pivot targets as we can identify to limit risk. One such target has been flagged in today's tout for the E-Mini S&Ps. It will work for bulls and bears alike, so check it our if you want to be prepared for whatever Mr Market throws at us this week.

McDonald’s, where a family of four can eat breakfast, lunch or dinner for less than it costs to prepare a meal at home, is blaming weak consumer spending for an unprecedented stretch of punk earnings . Someone should level with them: “It’s the hamburgers, stupid!”  Q3 profits were down by 30%, generating a lot of hissing and clucking on Wall Street. Portfolio managers must be scratching their heads trying to figure out how the fortunes of an American icon could have fallen so swiftly. Doubtless, Mickey D’s oh-so-clever ad-men are hard at work on a rescue effort, crafting a powerful new “message” for the Super Bowl audience. What they really need to craft is a hamburger that tastes more like one. Face it, we’ve been eating mystery-meat patties under the Golden Arches by the tens of billions for three generations, and what little savor they provide has come solely from the ketchup, pickles, mustard and onion on top. Ironically, it is the soaring popularity of the hamburger itself that may have contributed most to McDonald’s weakening sales. America is very obviously in the midst of a hamburger renaissance, as witness the rapid growth of such real-burger chains as Smashburger, Freddie’s, In-N-Out and Five Guys. You can enjoy the actual taste of beef at all of these places – or fill up for cheap at McDonald’s. And if you want the deluxe experience, there are more great bar-burgers out there for $8 to $20 than America’s food critics, magazine polls and foodies can celebrate. Here in Boulder, just to mention a few, are Tom’s Tavern (which has continued to offer the original bar burger even though the place was transformed into the upscale Salt restaurant); Drakes Haus, which features merlot-infused beef; Larkburger’s black-angus-on-a-bun  (“This isn’t a burger you hold. It’s a

Even on the weekly chart the vicious short-squeeze off the October 16 low looks impressive (see inset).  Will the move achieve new record highs? As a practical matter this should be of no serious concern to us, since we'll continue to trade price movement in whatever way best suits our goal of profiting with relatively little exposure.  Paradoxically, the least risky way to get long over the next few days would be to do so with the futures flirting with September's all-time high. Panic, fear, greed, uncertainty and, or course, stupidity will all be at an extreme then, but to us the chaos will just be "impulse legs" that are easily tradable using signals from the lesser charts.  Most immediately, the futures appeared bound for a Hidden Pivot target at 1966.00 when trading ended on Friday.  This implies a possible bullish opportunity for night owls on Sunday, but as always, if the resistance is easily exceeded, that would be a yellow flag for bears keen on intercepting the rally. Do it if you like, but mpt aggressively unless you've been long for the ride up. _______ UPDATE (11:40 a.m.): This post in the chat can speak for itself: "Great call on ES at 1966. It actually topped and 1965.75 and fell to 1944.5. That has made my week, and its only Monday morning." I haven't established a tracking position because no other subscribers reported doing the trade, either northbound or shorting the top.

This week's commentary implies that McDonald's shares are an attractive long-term short. Most immediately, the stock looks primed to fall to the 85.53 Hidden Pivot target shown. The fact that the stock market's powerful short-squeeze has lifted the stock somewhat makes the bet even more enticing. Accordingly, I'll suggest shorting two round lots anywhere above the 91.42 midpoint pivot (i.e., the red line). Use a stop-loss equal to one-third of whatever you stand to gain if the stock were to fall to the target from the price where shorted.  This is the "mechanical entry" tactic I have often alluded to in the chat room and which I teach as part of the Hidden Pivot Course.  If you prefer to use options, buy the Jan 17/Oct 31 85 put calendar spread 16 times for 0.70 or better. Our goal will be to reduce risk to zero or less by rolling the spread forward, shorting the nearest weekly calendar spread each Friday. _______ UPDATE (11:28 a.m.): With the stock up somewhat this morning -- don't these guys read? -- lower the bid to 0.68, and decrease it by 0.01 for each 5-cent gain in the stock above 91.86. _______ UPDATE (7:43 p.m.):  The spread closed at 0.70, but there's not much more we can milk from it, since the October calls we're trying to short closed at 0.03. Traders who have yet to act should wait to buy eight Jan 17 85 puts 'naked' with the stock trading near the 92.59 target shown. Those who are long the spread should first try to cover the short puts with a 0.01 bid, day order. If the order is filled, sit tight for the time being. _______ UPDATE October 28, 10:45 a.m.): The stock gapped up 61 cents on the opening to a spike

The Dow was up around 250 points when this session began, and because the broad averages seemed reluctant to correct, we looked for opportunities to get aboard a presumptive second leg up. Mostly, this entailed hunkering down on the very lesser charts of the E-Mini S&P. After one false start, we found a promising entry point with just a few ticks of initial risk. The rationalizations here are very finely nuanced and required as much psychologizing as paying attention to the mechanical details of tradable patterns.