By closing well above a clear Hidden Pivot resistance at 2921.75 given here earlier, the futures all but clinched a further push to at least 2973.25. I am recommending shorting there only if, guided by my insanely bullish targets, you've banked at least $1000 of profits on the way up. I expect a tradeable pullback from 2973.25, but this should not be regarded as low-hanging fruit. I say this because there are so many bears in the Rick's Picks Trading Room who have been salivating over the possibility that this psychotic short-squeeze rally, the most powerful ever witnessed in U.S. markets, is nearing an end. Such skepticism is what has in fact propelled it, and it is far more widespread than just the chat room. Rest assured that as long as there even a few bears still standing, the craziness will continue. Above 2973.25, I would suggest putting aside Hidden Pivot targets and substituting the obvious benchmarks that the mouth-breathers will be focused on: 3000, and thence 3121, where the futures made an important top in early March on the way down. There is also a 'magic number' at 2997.00 that, although not a resistance, meets criteria that I have been experimenting with for the last couple of months. _______ UPDATE (Apr 30, 9:04 a.m. EDT): The futures have pulled back sharply from a wee-hours, short-squeeze peak at 2965.00. A missed tally target, especially one so clear as this one, should always be taken as a sign of weakness, notwithstanding the fact that in this case, it revealed itself in the context of a world-beating rally. Think of it as Garbo's ominous cough in the second reel of Camille. It certainly did deny us an opportunity to get short on our terms. Oh well.
A trade posted in the chat room at 1:52 p.m. was showing a $182 gain at the bell, with 75% of it exited. Its purpose was twofold: 1) to provide a low-risk, low-cost 'starter' position in a popular gold vehicle; and 2) to show the many subscribers who have recently signed on how they can profit and have fun doing it by tuning to the chat room. On both counts, this gambit was a success, since GDX took off toward the end of the session. Here's the recommendation that went out initially. Judge for yourself whether you could have done it: "If [the stock] has gone no lower than 32.82, buy-stop [yourself into] 400 shares at 33.02. Place a stop-loss on all of it at 32.81, worked against an o-c-o order to exit 200 shares at 33.20. This will be a 'starter' long position." Many subscribers reported doing the trade as directed. Looking ahead, we'll shoot for the fences -- in this case a 'D' target at 38.01 (30-min, A=29.55 on 4/21). Stay tuned for possible adjustments, however, since we may do a covered write with call options if and when GDX hits the first significant resistance enroute to the target, a midpoint Hidden Pivot at 35.42. That will be my minimum upside objective if the stock closes above x=34.12 for two consecutive days. If you'd rather take the money and run, by all means do so at will. Rest assured, there will be other similar opportunities down the road. _______ UPDATE (Apr 30, 12:40 p.m. EDT): My bad, since I drifted off to sleep last night intending to put a stop-loss on the position. This morning was so hectic that I barely gave GDX a thought. Exit now, around 32.58, since the stock has stopped being fun for the
DaBoyz jettisoned subtlety on Tuesday as they attempted to distribute as much stock as possible into a bull cycle begun last week that appears to be losing steam. The increasing urgency of this task was evident on the opening bar, a bull-trap rally that notched the high of the day. Thereafter, the futures sold off 60 points over the next hour and spent the rest of the session screwing the pooch. Don't count the sleazeballs out, however, since they were hard at work squeezing shorts with a mid-evening rally designed to take advantage of poor liquidity and a dearth of sellers. The smart ones will hold off shorting until their hapless ursine bretheren have paid the full price for being early.
Rick's Picks subscribers have finally embraced an ambitious rally target first broached here when the Dow Industrials were trading nearly 3000 points lower. If you're keen on getting short at this prospective Hidden Pivot peak, read my E-Mini S&P tout for Tuesday (below) first, since it takes a skeptical view of the notion that the insanity can't last. Stocks are already higher than most of us could have imagined just a few weeks ago, when bad news was piling up thick enough to smother the decade. All it has taken to erupt the stock market into a Vesuvius of stupidity was a few well-intended but disingenuous words from our Treasury secretary. Mnuchin has spring-loaded hopes enough to trigger a short-covering panic, but it's your choice whether to resist it with rationality or accept it and scuddle for yet a few more days with the lemmings.
During the more than two weeks my bullish forecast for the E-Mini S&Ps has fixated on a 2921.75 target, the futures have mostly acted constipated, but also at times tedious, violent (in both directions), turgid and deceptive. One thing that hasn't changed is the chart itself, which never wavered from the once-laughable target no matter how grim the news. There were skeptics in the Rick's Picks Trading Room when the broad averages dove last week for two straight sessions. More recently, however, with four days of upward progress, a presumptive finishing stroke to 2921.75 now looks like a given. It is no longer a matter of whether the target will be reached, but how soon. Some in the trading room speculated it would occur as early as Monday night. This tells me that one of two things is about to happen: 1) the rally will die without having reached the target. I give this scenario a 15% chance; or 2) buyers will soon reach 2921.75, then blow past it with such force as to leave us wondering whether new all-time highs are coming. If this proves to be the case, be aware that it will have nothing to do with the ridiculous, conflicted reasons the MSM is sure to concoct. We are witnessing a powerful short-squeeze is all, even if the dim bulbs who invent the news each day are incapable of choking out those two words, and even if none of them will ever understand that the ups and downs of the stock market are not driven by the economy, but the other way around. With that in mind, realize that the Wall Street operators who have been nurturing and manipulating this short-covering binge are not about to squash it with heavy-handed selling, at least not until the last
My attempt a month ago to crowdsource bullish trading ideas in this stock elicited just one timely suggestion -- thank you, Ray -- although there were a couple of old-school Pivoteers who took the ostensibly easy route by shorting the stock at each minor Hidden Pivot rally target as it rose massively from the low $20s. There was a time not long ago when I tracked GDX and made frequent trading recommendations. Over time, though, it wore me out, especially the psychotic swoon in March. I figured that if the interest was there, there would be plenty of tradeable ideas aired in the room, but I figured wrong. Anyway, I don't want to see GDX double in price again and find that we -- meaning all of you who are reading this -- never held an "official" position. I am therefore jumping back in again to play a more active role, and it will again be commensurate with the interest that you show in trading/owning this vehicle. No matter what, I will be happy to vet any set-ups that others post. The chart explains why GDX is 99.99% certain to run up to at least 36.75, presumably over the near term. It was a buy last week at 33.06, stop 31.83, but it's too late for that now. If you are a beginner or new subscriber who has never netted a dime off any trading service, especially Motley Fool, I am going to make achieving this goal as easy as for you as I can. In the weeks ahead, if you don't have the time or inclination to monitor the chat room for simple trades like the one that is coming in GDX, then I'd suggest checking out the touts section from time to time for cheap, low-risk 'mechanical' set-ups
[A longtime contributor to Rick’s Picks thinks the IRS is about to come down hard on hedge funds and other trading entities that appear to be flourishing in these economic hard times. Read Larry Amernick’s editorial below to understand why the idea is likely to be a political winner. RA] As act one of the pandemic crisis winds down, the curtain on the second act is about to go up. The President will slowly lift the shelter-at-home order, and an experiment in a new, post-isolation world will begin. We do not know if it is too early to allow social behavior. Nassim Taleb, author of the best-selling The Black Swan, argues for a prolonged isolation period. However, we cannot allow the economy to lie dormant for a long time. Already, 22 million Americans have lost their jobs. With the government throwing trillions of dollars from helicopters, it is time to start asking, what is next? Immediate winners are online purveyors like Amazon and Netflix, whose business models are a correct fit for the current environment. Hedge funds and other investment pools are additional winners. These entities arrived early to drink from the public trough and received large sums of money from the Small Business Administration’s Paycheck Protection Program. At the same time, residents of the exclusive Fisher Island were known to all receive Corona Virus tests. An Angry Public This information is not lost on Main Street, and eventually there will be hell to pay as an angry public sees the inequities in the distribution of both medical tests and government handouts. The unprecedented amount of public liquidity will end up inflating asset markets, adding to the growing disparity between the “capital” class and the rest of the nation. This conflict illuminates economist Thomas Piketty's concerns about the inequality
After two weeks of meaningless ups and downs, stocks seem in need of instruction. Or inspiration. Or something. It will likely come in the form of a headline, but don't expect the news to be anything special, or even interesting. Bulls/bears are ready to seize on just about any item that the news media could pretend or claim is significant. Thursday's morning's headline in the WSJ concerned a private equity deal for Victoria's Secret, a bra-and-panty has-been, and for all we know, the reported souring of the deal was the cause of the stock market's rally in the first hour. Regardless, my aging, bullish target at 2921.75 remains theoretically viable. I won't pretend I'm as enthused about it as I was two weeks ago when it emerged, but it's all I've got to offer you at the moment. A whopping, 145-point decline would invalidate it, but little else save Armageddon.
A wasteful, do-nothing day on Wall Street. The tedium is hard to fathom, considering how interesting these times are. The broad averages rose steeply in the first 90 minutes, then spent the remainder of the session giving it all back, although no more. For traders, the tedium could set up a test of whether it is better at the moment to view the glass as half-empty or half-full. Someone in the chat room said the day's price action described a 'flat abc', an Elliott Wave term. This supposedly signifies a 'wild-card' day: pick 'em and take your chances. Candlestick chartists use 'doji' formations to draw similar inferences. For my part, I held no position at the bell and will be content to spectate when stocks open Friday morning. My gut feeling is that the gratuitous hump traced out by stocks on Thursday was just that: gratuitous. I still have outstanding rally targets for the S&Ps and AAPL, our favorite bellwether, that lie significantly higher. I could never be so certain of them, however, that I would take a position home over the weekend.
In the Trading Room this morning, a subscriber recalled my certitude recently that AAPL's bear rally would reach a minimum 313.58 before sputtering out. As it happened, the stock swan-dived 8% after going no higher than 288.25. Should I double down on my target? As far as the subscriber was concerned, Goldman Sachs already won the bet: "Rick," he texted, "I'm going to give the point to Goldman." True, the renowned investment firm had presciently waved the yellow flag just ahead of AAPL's fall. Some would say it was Goldman's warning itself that caused the stock to plunge, and they would be right. That doesn't necessarily mean it won't keep falling. For all we know, Goldman's vaunted analysts have nailed a very important top. But I doubt it, given the fact that the 288.25 high slightly exceeded an 'external' peak at 286.44 recorded a month earlier (see inset). The seemingly failed rally generated a powerful, albeit well camouflaged, impulse leg on the daily chart, implying that the selloff begun Friday is corrective and will eventually give way to a new rally leg. Anyone care to lay me some odds? Incidentally, my long term forecast for AAPL calls for an eventual drop below $100 -- an outlook far less sanguine than you will find among self-aggrandizing dartboard prognosticators like Goldman who retail stocks to the public, and whose front-run advisories notoriously lag big moves in either direction. ______ UPDATE (Apr 27, 8:59 p.m. EDT): No, you're not imagining it, Apple really does face some big problems, including: 1) shifting assembly out of China; 2) maintaining sales of a high-margin product during a global recession/depression, and 3) competing in a streaming market glutted with competitors. Even so, I'll stick to the bullish targets flagged above. Buyers are struggling with the 285.26 midpoint
