Subscribers used a 12.92 target posted in the Trading Room Wednesday morning to get long just a few ticks off the bottom before the Nasdaq index plunged. Many reported jumping on the trade in order to take advantage of the 2x leverage QID provides for shorting the Nasdaq 100. Although I left it up to individual subscribers to decide how to manage the ongoing risk, I am establishing a tracking position because some reported still being short at the close. Assuming profits were taken on half the position when QID was up $1.00 would leave 200 shares an adjusted cost basis of 11.92. Offer a round lot to close at 16.10, o-c-o with a stop-loss on 200 shares at 13.27. [Note: I erroneously gave 14.35 earlier. That was close to the intraday high. RA] Be sure to check back intraday, since I will likely trail the stop. _______ UPDATE (June 14, 10:55 p.m.): Lower the 16.10 offer for 100 shares to 15.05, but save the last round lot for a shot at 16.10. The stop-loss should be raised to 13.53. _______ UPDATE (June 16, 10:31 p.m.): The remainder of the position was closed out Tuesday night at 13.53, producing a final profit of $322.
Nothing like a little good news to stop the stock market's rally dead in its tracks. Powell announced that nearly-free money would remain available to big borrowers in more or less unlimited quantities until 2023. The Dow Industrials dropped nearly 300 points on the news, like a six-year-old having a snit when his sundae arrives with no cherry on top. Perhaps this latest gift from the central bank struck investors as a tad stingy? Compared to Europe, where they're not only giving away money but slapping lenders who don't with a surcharge, perhaps our guys have a point. One might have hoped that grim pandemic news out Wednesday might have balanced out the negative reaction to the stimulus news. The pandemic reportedly is resurgent in the U.S., most particularly in Texas, where a record 2504 new coronavirus cases were reported in a single day. Investors have routinely sent stocks higher on news like that, or at least marked time for a day or two. Alas, the heartless bastards showed no exuberance whatsoever. Are times so tough that bad news is treated like..bad news on Wall Street?
Not that we’d forsaken them. They are still our main workhorse for getting into trades, and we worked them pretty hard during this session. It turns out that when the trend is particularly strong, we needn’t wait for a pullback from the sweet spot to do the trade at the green line. Not only will a pullback from p itself work, and often, but so will pullbacks from p2 to p. There are some nuanced shadings to consider when you set up these trades, but you will see for yourself that the rules are not unusably subjective.
Two 'mechanical' trades I'd disseminated to subscribers Monday night and Tuesday morning, respectively, are showing gains totaling around $7200 at the moment. They were flagged in 'tout' updates for the E-Mini S&Ps and August Gold, and both included charts to help you visualize my instructions. The bull trade in gold was rated '6.6' out of 10-- not stellar odds, but not bad either for subscribers who may have grown tired sitting on their thumbs as the broad averages have continued their vertical rise. If I hear from at least two subs who did either trade and are still in it, I'll establish a tracking position. In the meantime, unfulfilled rally targets for both are provided in the latest updates.
The Dismal Scientists were hard at work over the weekend, cheering the market's powerful short-squeeze rally as though stocks somehow deserve to be trading at or near-record levels. Speculators evidently were not thinking about the pandemic's effects on the global economy, only about a statistical blip in job creation that flouts common sense. Who were the buyers? Bored millennials, according to a story posted at Bloomberg. Just the kind of support Wall Street needs, not that anyone cares. Adults who should know better included economist Ed Yardeni, who saw Friday's rally as a sign that the "underlying strength of the American economy will emerge intact." He ought to look around, since a drive through any neighborhood in America will reveal how many business are never coming back. Let the tour start in Manhattan, if he thinks that it is just mom-and-pop stores that have been fatally wounded. A Reflex Reaction Far from a sign of resilience in the economy. the rally is simply a reflex reaction to a tidal flood of money created from thin air by the central bank. At these absurd heights, stock prices no more reflect economic forces of supply and demand than do Treasury bonds, corporate junk and real estate. The gaseous effusion driving shares is worse than malinvestment on an epic scale, it is inflating a debt bubble that eventually must pop. Yardeni and many other economists who cannot see the obvious are helping to stoke extraordinary popular delusions and crowd madness that cannot but end with a deflationary bust. It will be catalyzed mainly by imploding valuations for real estate and energy resources that thinly collateralize a quadrillion-dollar derivatives market. Once this financial catastrophe has run its course, it will require a hyperinflation to wipe out the government's portion of our debts, which have
Bulls faced two daunting Hidden Pivot obstacles on Friday, demolishing both with little effort. They'd been well advertised here, making them less than ideal as places to get short. Fortunately, they appear to have kept some subscribers who've had trouble believing this absurd rally from getting short prematurely. You should prepare yourselves now for upside to at least 3300.50, the Hidden pivot shown in the chart. Judging from the way the uptrend has impaled the secondary pivot at 3165.44, the June contract should have little difficulty getting there. We'll want to squeeze off a short at that point, but as usual, I am recommending the trade mainly to those of you who have made some money -- at least $1000 in this case -- on the way up. Please note that the equivalent target for the September contract, which will become active the week of June 15, is 3285.50. Here is the chart. _______ UPDATE (June 8, 9:28 p.m. EDT): Use this pattern to trade the little monsters en route to the bigger-picture target at 3300.50 noted above. It projects to 3259.50, and all levels -- x. p and p2 -- can be used to position a 'mechanical' bid that meets the criteria of the Hidden Pivot Method. As always, seek real-tie guidance in the Trading Room if you are interested._______ UPDATE (June 9, 10:22 p.m.): You're up $5200 at the moment if you used the pattern linked in the previous update to stage a 'mechanical' bid at the green line. The set-up was textbook-perfect, although it took the futures six hours to get airborne after they tripped a buy signal at 4:30 a.m. Eastern. Here's the chart. If I hear from two subscribers who are still in the trade, I'll establish a tracking position. ______ UPDATE (June 10, 10:22
DIA's gap-up openings have provided no opportunities to get long on-the-fly. Instead, we'll have to settle for a short initiated at D=280.28, a Hidden Pivot that is all but guaranteed to be reached because of Friday's gap through p=265.48. I'll suggest buying the first near-expiration puts priced under $1 when DIA gets within 0.05 points of the target. I may be able to refine that strategy in real time, so stay tuned to the Trading Room if you care. A move to the target will turn the old record high at 295.87 magnetic, so we should have no illusions about D's stopping power. _____ UPDATE (June 10, 9:40 p.m. EDT): The 280.28 target is still an odds-on bet, but DIA looks like it's fixing to roll down hard before the next bull thrust. Ordinarily I would suggest placing a 'mechanical' bid at 265.48, but my gut it saying we'll be able to get in cheaper if we wait. Here's a nice chart to hearten all of you bears who have been waiting so patiently for a breath of sanity. _______ UPDATE (June 11, 8:21 p.m.): DIA crashed without quite reaching the 280.28 target, and although some subscribers apparently got short ahead of the plunge, they acted on their own initiative, so I am not establishing a tracking position. My gut feeling is that the selling will continue into next week, and I'd therefore suggest caution if you jump on any rallies on Friday. _______ UPDATE (June 14, 11:07 p.m.): The midpoint pivot has held so far, since the Mini-Dow futures have traded no lower than 25,080 as of 11 p.m. Sunday night. If it is breached decisively, that would put the 237.52 target in play. The pattern could be tradeable, so tune to the chat room if you care. _______
Gold had a lousy week, even dipping beneath a clear Hidden Pivot support on Friday to show bulls who's boss. The 1671.70 intraday low was a great place to have faded the trend, although not minutes ahead of the closing bell. That's no assurance the selling won't continue next week, especially if the stock market rampages anew. For all the nasty selloffs we've seen in bullion over the last couple of years, bears have shown themselves to be just bullies, too cowardly to throw a punch unless investors' interest has been diverted elsewhere. We'll continue to look for opportunities in either direction, but with no illusions about easy set-ups that can be detailed the night before. Stay tuned to the Trading Room for timely guidance. ______ UPDATE (June 8, 9:45 p.m. EDT): The futures have come within inches of the 1710.80 target I posted in the Trading Room at 15:31. The clarity of the pattern is sufficient to imply that even a small penetration of perhaps $1.50-$2.00 would augur still higher prices. Here's the chart. _______ UPDATE (June 9, 9:39 a.m.): Here's what's happening in GCQ at the moment: https://bit.ly/3h40CBo Gnarliest pattern ever, but with a sausage-y 'B'. I rate the mechanical 'buy' a 6.6. _______ UPDATE (June 9, 10:45 p.m.): If you bought on the pullback to the green line as suggested in my last update, you are currently sitting on a profit of $2400. If I hear from two subscribers who did the trade, I'll establish a tracking position. Here's the chart. The 1736.30 target remains viable. ______ UPDATE (June 10, 9:51 p.m.): Gold is in its fifth week of range-trading, so we ought not be too presumptuous about what might occur next. If this is the usual failed rally, look for a top somewhere around 1772.90 [NOTE:
AAPL's performance on Friday left no doubt about where it is headed. The gap through the 327.34 midpoint Hidden Pivot has put the stock on course for a run-up to D=354.47. This implies the broad averages will be moving higher too (and gold probably lower), since AAPL is the most popular must-own stock since man has walked the Earth. Jumping aboard a speeding freight train is never going to be easy, but we can look for opportunities intraday with the potential to let us in with risk well controlled. Stay tune to the Trading Room if you're interested. Options will not likely be the way to go because 'implieds' are on the moon, but you can trade odd lots of 2 to 4 shares if you prefer. ______ UPDATE (June 10, 10:04 p.m. EDT): The 354.47 target that I'd all but guaranteed (see above) caught the top of a $21 spike within 30 cents. No one reported making use of this Hidden Pivot in the Trading Room, but if you did please let me know so that I can establish a tracking position. ______ UPDATE (June 11, 7:01 a.m.): Some subscribers evidently did use the target to get short at the exact top, so I am establishing a tracking position: We are short 400 shares from 354.47. Use a break-even stop for now on all of it, worked o-c-o with a bid at 350.80 to cover half. If it's filled we'll keep at least 25% of the position for a potential home run. Don't underestimate the ability of this stock to cripple, maim and defenestrate bears, since the smartest money in the world is in it up to their eyeballs. _______ UPDATE (7:23 a.m.) I just realized that Apple was trading near 348 when I posted the recommendation to cover
A 'mechanical' buy at p=1011.94 recommended here two weeks ago remains viable and is showing a paper gain of about $16,000 at current levels. If the stock achieves the 1166.99 target, the gain would be exactly $62,020. For those who hold an actual position, including odd-lotters, I'd suggest taking a partial profit on half at p2=1089.47. The trade was posted mainly for the benefit of new subscribers who have not had the opportunity to observe 'mechanical' set-ups at work. The strategy is particularly well suited to trading vehicles that move violently, and it has yielded some nice trades including one last year in bitcoin that is still 'live' and profitable, with a target above $20,000. _______ UPDATE (June 11, 8:43 p.m. EDT): The stock is having a bad week, but not as bad as some. Let's see if the sleazeballs and maniacs who have been driving CMG can keep the concept of Burrito Nation alive until the closing bell. Key support comes in around 987. I am still tracking two round lots showing a substantial gain, but I'm going to close out the position now at a current price of 1000.74. The implied profit on the trade is $5650.
