Rick’s Picks

DIA has been playing pattycakes with my 304.07 target for weeks, headbutting it repeatedly without generating any significant pullbacks. There is no question that buyers are feeling the resistance. A two-day close above it, or a print exceeding 307 (or so) intraday, would imply a bullish breakout, but until such time as it happens, the burden of proof will be on bulls for a rare change. I'd suggested buying February 19 250 puts for 0.80, but Friday's mild weakness left them just out of reach. Keep trying, but only if DIA has not traded above 304.07. If that should occur, I will update this guidance. ______ UPDATE (Dec 21, 6:04 p.m.): I still like the puts for 0.80, but ratchet it down a nickel at time if DIA moves above 304.07. ______ UPDATE (Dec 22, 8:31 p.m.): In the chat room today I recommended scaling in a few puts on rallies, even if the Feb 19 250s have remained just out of reach. The smell of distribution is so thick you could cut it with a knife, and you will have noticed by now that even though DIA has been head-butting my longstanding Hidden Pivot target at 304.07 for weeks, it has not been able to penetrate it. Here's a chart that shows this distribution clearly.

The pattern shown is so gnarly-perfect that I can scarcely imagine it not working. By this I mean to imply, looking ahead, that 1) QQQ will not thrust decisively above it soon, meaning within the next 2-3 weeks, and 2) Friday's top just 31 cents below the target could conceivably mark the start of a bear market.  The E-Mini Nasdaq made a corresponding top not at a 'D' target, but at the p2 'secondary pivot' of a larger pattern. If you were able to buy put butterflies on QQQ using 240/250/260 options expiring on Feb 19, please let me know in the chat room so that I can determine whether to establish a tracking position. Unless the Cubes fall apart straightaway, there are likely to be additional opportunities to buy the 'fly on-the-cheap. _______ UPDATE (Dec 21, 6:10 p.m.): A bid of around 0.20 still looks about right for the butterfly spread, but you can go 2-3 cents higher if none come at the lower price. _______ UPDATE (Dec 22, 8:36 p.m.): Numerous subscribers have reported buying the butterfly spread for as little as 0.21. Accordingly, I will track four of them for 0.22. For now, do nothing further if you own the spread.

I've selected the simplest rally pattern that meets out rules in order to come up with a 3767.25 target. Although there is no reason to doubt it will be reached, we shouldn't presume to know whether it will be impaled. Although that would indicate significantly higher prices to come, it shouldn't inhibit us from laying out speculative shorts at the target. There is one other, lesser Hidden Pivot resistance that you should be aware of: 3744.00. The provenance of this 'D' target is shown in this chart. It looks like a high-odds spot to try shorting with a stop-loss as tight as you can abide. _______ UPDATE (Dec 21, 6:17 p.m.):  The 3767.25 target is still viable as a minimum upside projection, and it would be a gift if we get an opportunity to lay out shorts up there. You can use a 3796.82 target in the cash index if you'd prefer to buy put options. Far-out-of-the-moneys expiring in mid-to-late February are suggested, with a $4 limit on vertical spreads.

The bullish pattern shown does not square up with the charts of other indices, since last week's high in this vehicle did not reach its 'D' target. However, we can consider NQ as predictively aligned with the others, since it is hardly unusual for rallies to fail at the p2 'secondary pivot.' This holds true even for long-term trends, even bull markets.  I have not advised shorting this vehicle as I did its QQQ cousin, however, because p2 tops are not often definitive, but also because intraday price movement in NQ has been too nerve-wracking to flirt with other than by way of relatively labor-intensive rABC set-ups.  Stay tuned nonetheless, since an easy opportunity could open up. ______ UPDATE (Dec 22, 8:40 p.m.): Shorting QQQ still looks less stressful, but if you trade futures only, give me a shout in the chat room and I will attempt to provide timely guidance.

Silver has pushed marginally above a three-month consolidation range, signaling minimum upside to a 26.66 target broached here earlier and shown in the chart. It is the terminus of a small, bullish pattern that has taken three weeks to play out. A move decisively exceeding the target would put the 28.30 midpoint Hidden Pivot of a much larger pattern in play. It is also shown in the chart and correlates with a D target at 34.67.  I expect the lower resistance to be tested, but notice how that would put the March contract slightly above a cluster of 'external' peaks recorded in September. The result would be an impulse leg of significant decree. Overall, the picture suggests that minor things are happening now that could easily turn into major things. _______ UPDATE (Dec 21, 6:30 p.m. EST): Bulls impaled the 26.66 pivot, putting p=28.30 in play as a minimum upside target for the near term. _______ UPDATE (Dec 22, 11:12 p.m.): Silver's two-day slide is more worrisome than gold's, hinting of more downside to at least p2=24.929, or d=24.300 if any lower.  Both are  correcting strong impulse legs, however, so bulls should be given the benefit of the doubt for now. ______ UPDATE (Dec 23, 9:30 p.m.):  Midgets duked it out with no clear winner, although the good guys were able to turn the futures higher from well above 24.92 benchmark cited above. This is faintly encouraging, but I wouldn't hazard much more than that predictively. However, a decisive thrust above 26.28 would hint of a break in the tedium.

A recommendation to buy GBTC 'mechanically' that was sent out Wednesday night caught the week's low and enabled subscribers who acted on my advice to reap a same-day gain of as much as 31%.  The stock (an ETF, actually) popped to 21.50 Thursday after tripping the entry signal at 19.66. Based on my last update, you should still be holding as much as 50% of the original position for a possible ride over the next 2-3 weeks to as high as D=25.85. I'd use a break-even stop in the meantime, since this vehicle can be nasty when a trend becomes too popular. ______ UPDATE (Dec 15, 3:19 p.m.): Offer another 25% of the original position at p2=23.73. If filled, that would leave subscribers who followed my guidance with a hundred shares (or 25% of the original position) whose profit-adjusted cost basis is $9.33. ______ UPDATE (Dec 16, 8:49 p.m.): Officially, we exited the remainder of the position at 25.85, just off the intraday high. The theoretical gain on this trade would have been $1652. If you still hold part of the position and are playing for a moonshot, use 31.66 as a target. GBTC looks like a very good bet to get there. Also, stay tuned, since it may be possible to re-board this vehicle using a 'mechanical' set-up on the daily chart.  The stop-loss would be around $3.50 wide. _______ UPDATE (Dec 17, 9:55 p.m.): Stupid but entirely predictable, the moonshot advertised in my last update happened in a single day, generating a 30.92 high before demand evaporated. That sent GBTC plummeting nearly $4, but rest assured bulls will be back, since a clear Hidden Pivot resistance on the weekly chart was exceeded by a mile. One of my coordinates on the intraday chart was slightly off, but when

The futures have dipped slightly below the green line at 1830.60, quietly signaling a drop to at least 1781.40, a midpoint Hidden Pivot support shown in the chart. Bears have not exactly romped since gold topped in August at 2099, but they have dominated the action, often to devastating effect on those occasional days when conditions were right for a takedown.  The longer-term charts are unambiguously bullish, but it would appear bullion has been biding its time, presumably waiting for a signal change in the Big Picture. It is remarkable that bitcoin has usurped gold's historical role as a hedge against inflation. This anomaly seems unlikely to last, but for the time being bullion's loyal supporters will have to  get used to seeing it underperform cryptocurrency that is intrinsically valueless. ______ UPDATE (Dec 15, 8:32 a.m.): Here's a new chart that corrects the erroneous 'B' low in the original along with its downside targets. The result lowers p and D by around $5 to, respectively, 1776.80 and 1673.7.  This does NOT mean I am more bearish. In fact, other than on rigged 'takedown' days, bears seem to be struggling for every inch. Moreover, if today's so-far gratuitous rally gets rolling and exceeds 1879.80, that would invalidate the new targets. A further push exceeding 1902.40 would generate the first impulse leg we've seen on the daily chart in ages. _______ UPDATE (Dec 17, 1:22 p.m.): This morning's strong rally missed creating the impulse leg we'd wanted (see above) by five ticks.  Bulls would seem to have the gumption to get it done, but with gold, it will always be a matter of 'trust but verify'. Proof therefore awaits.

Ho-hum. The futures have been plodding toward a 3740.75 target since late September, pausing for nearly two weeks in October in order to scare the hell out of anyone who briefly may have lost faith in the Fed's ability to control...everything. I've commented in the chat room on the pattern shown in the chart, although the target has been revised slightly. My point 'A' low is not as well developed as I would prefer, but its June 25 date corresponds to one in the December chart that is a picture-perfect. A pullback to the red line would be read by most market-watchers as a possible disaster in the making, but my perspective is that it would offer a pretty good 'mechanical' buying opportunity with a stop-loss at 3373.75. _______ UPDATE (Dec 14, 8:47 p.m. EST): I hadn't noticed the subtle point 'A' low in this chart, but the fact that it exists, however ineffably, suggests we should be on our guard now that the rally has topped at the target. _______ UPDATE (Dec 16, 9:04 p.m.): Here's a pattern I posted in the chat room at the start of the day with a 3843.50 target that leaves some room if, as appears likely, the futures continue higher.

The cubes came within inches of a 312.29 target we've been using for months to keep us agreeably on the right side of the trend.  Subscribers who got short near the actual high  at 308.60 should take a partial profit on half of it and hold the remainder for a swing at the fences. We hold no official position because the gap between the actual high at 308.60 and the target was too large. It's too early to tell whether the downturn will get legs, but usually it is a bearish sign when a target as narrowly missed as this one gives way to a nasty countertrend leg of 3% or more. That would be about twice what we've seen so far.  ______ UPDATE (Dec 15, 5:26 p.m. EST):  Let's try to get short at a potential major top, bidding 0.16 for eight Feb 19 240/250/260 put butterfly spreads. Stay tuned, since I may adjust the price or strategy as the Cubes approach the 312.29 target.  _______ UPDATE (Dec 17, 10:11 p.m.): We're getting close, since the midpoint of the spread as quoted is 0.18. If the butterfly remains just out of reach, or if you'd like to try something different, try bidding 0.68 for eight Feb 19 260/250 put spreads. This would give us the first leg of the butterfly if QQQ subsequently drops. If we were then to short eight 250/240 put spreads, we could conceivably put on the 'fly for pennies or even a credit.