Rick’s Picks

We cashed out some profitable butterfly spreads pegged to a still-viable 151.94 rally target, but there's no rush to put on the position again. To be sure, AAPL remains capable of reaching the target in the weeks following a Trump victory. But as I tried to make clear here and in the chat room, the stock is unlikely to take off until investors are pretty confident about this. Things were edging in that direction on Friday after Biden got hit with some damning charges concerning graft and corruption that made him and his family distrustfully rich during his 50-year career as a politician.  But the reaction so far to the news, which has been covered only by Fox, has not been strong enough to light a fuse on Wall Street. Athough the smart-money guys who manipulate AAPL for a living may seem bold at times, they are in fact wussies who would not dare make the slightest move unless they are certain the headlines or story of the hour will support it. For now, let's see how much further they take the stock down before we jump on some more bull spreads. ______ UPDATE (Oct 29, 10:25 p.m. ET): AAPL's quarterly results in China disappointed, and that will put some drag on this otherwise unstoppable bull-market engine. The negative report will be forgotten by Monday and will have no effect in any case after the election. Stay tuned, since Monday's edition may contain suggestions for leveraging the gusher-of-relief rally that will happen if Trump wins.

The Indoos have been lollygagging for more than two months, biding their time until DaBoyz are fairly certain of how the election will turn out. That could come as early as next week if the stench of corruption swirling around Biden becomes too powerful for the mainstream media to ignore. That could take some doing at the New York Times, whose editorial offices are already an ethical cesspool, and at the Washington Post, which is owned by a man, Jeff Bezos, who obviously despises Trump. Ditto for Mike Bloomberg's vast news organization. In the meantime, DIA, an ETF proxy for the Dow Industrials, has been in a holding pattern. My gut feeling is that it will hit the 297.18 target regardless of who wins the presidential election, but if it's Biden, the Indoos will fall even more sharply than they did in March. The easiest way to leverage this scenario is to buy way-out-of-the-money puts that expire three to four weeks after the election.  Accordingly, I'll recommend bidding a very stingy 0.44 for ten Nov 27 240/250/260 put butterflies. (It's worth around 0.58.) If you are uncertain about how to do this, please review the recorded lesson on butterfly spreads located on your account page. This order is good through Wednesday, but I may adjust it, possibly with the goal of legging into the spread for significantly less. _____ UPDATE (Oct 28, 11:10): The cautious bid I advised was a crucial step behind the big move down, so you can shelve the order for now. _______ UPDATE (Oct 29, 10:33 p.m.): DIA dipped impulsively beneath a key low at 265.27 recorded on 9/24. This would have stopped out more than a few bulls and therefore lightened the burden of profit-taking on the bounce. It wasn't much of a bounce, however,

We hold ten Nov 6 130 puts for 0.16 as a hedge against a Biden victory, but they will offer scant consolation if the tragedy of a Biden/Harris administration comes to pass. I consider this improbable, however, and the likelihood of Trump's re-election would be confirmed if IWM exceeds the 169.39 target shown with a manic leap. It looked as though buyers were developing thrust for this last week, when would-be resistance at p2=160.36 was gradually turned into support. The Russell 2000 and the Industrial Average have lagged the Nasdaq 100 since March, but they appear eager to make up for lost time. A strong across-the-board rally this week would imply that investors have finally realized the pollsters are the same nitwits they were in 2016. _______ UPDATE (Oct 26, 9:56 p.m. ET): Sell half your puts if they double in price. They traded back up to 0.16 today, and although that is our official entry price, some subscribers reported getting in for as little as 0.08. _____ UPDATE (Oct 28, 11:11 p.m) With stocks plunging today, the puts traded as high as 0.35, allowing some subscribers to as much as quadruple their initial stake. At the very least, using an 'official' price of 0.16 representing the worst actual fill reported on entry, subscribers would have been able to double out of half of their positions at 0.32 as advised. Now offer three more puts to close for 1.10 and keeping the remaining two until next week. ______ UPDATE (Oct 29, 10:38):  The talking heads said investors were 'hopeful' for a few hours today that Biden stimulus will be good for small-caps. Not much we can do about it but sit tight. The puts have some critical time left on them.

I've returned to the long-term chart, which shows a trendline that precisely foretold the so-far modest 3%  rally begun in early September from 91.75. It's plain to see that the Dollar Index will retest the line, which comes in around 92.13 this week. I expect the support not only to be reached, but to be at least slightly exceeded. That would not necessarily doom the dollar, but it could conceivably trigger a strong snap-back rally once bulls have been shaken out. Alternatively, if weakness continues below the trendline, my minimum target would be 91.72, and thence 90.20, and finally 88.69. These are Hidden Pivot levels that come from a bearish pattern shown in this weekly chart.

I was only mildly bearish on this vehicle when the week began, but Wednesday's intraday high generated a divergent stochastic peak that could spell trouble just ahead. Accordingly, I'll recommend buying ten Nov 6 130 puts for 0.15-0.20.  This is a highly speculative bet, and you should be prepared to lose it all. But it seems underpriced to me, since IWM has shown itself capable of falling 20 points in a single day. The position will settle after the election, and that makes the puts look like an even better buy. _______ UPDATE (Oct 22, 12:43 p.m.): Subscribers reported buying the puts, so I will track ten of them for 0.16, the highest price paid. I've suggested buying a few more for 0.09, day order, but keep in mind that this is money you should feel comfortable kissing goodbye.

For the time being I've replaced QQQ with this vehicle, an ETF for playing the Russell 2000, because it seems to have a stronger following in the chat room. I also like the way the bullish pattern has played out, especially when it triggered what turned out to be a perfectly timed 'mechanical' buy three weeks ago at the green line. It would do this yet again on a pullback to the red line, although the opportunity looks like a longshot bet to materialize at this point. More interesting is the 169.43 'D' target, which not only appears likely to be reached, but to generate a tradeable top that we can short with out-of-the-money put options.  Stay tuned, and don't hesitate to flag opportunities to get long in the Trading Room, since they can be vetted by our own experts. ______ UPDATE (Oct 20, 5:07 p.m.): IWM looks like it's about to do a Lomcevak, but bears shouldn't get their hopes too high. It's natural for this Russell 2000 vehicle to look winded as it hovers just shy of the record peaks recorded earlier this year. You can see buyers' fatigue in this chart.  But it looks too obvious to produce a windfall for those betting on a steep downdraft. More likely is a modest swing trade, so stay tuned to the chat room if you're interested.

The usual geniuses have attributed last week's stock-market stall to growing fears that the Democrats could sweep in November.  Any sentient adult watching the news, however, or video footage of Biden's dismal public appearances, understands why these fears are unfounded. Even so, they held sway over traders for most of the week, preventing the E-Mini S&Ps from reaching a 3571.50 target that should have been a lay-up. Bears could claim no great success either, however, and that's why we should stick with the target as the new week begins. Moreover, you can buy a pullback to p=3384.75 'mechanically', using a stop-loss at 3322.50. An rABC or 'camouflage' set-up should be used to pare the entry risk down to perhaps a tenth of that. ______ UPDATE (Oct 20, 5:20 p.m.): We'll back away for now, since the shallow stall just shy of early September's record-high is just courting anxiety.

The 12,808 rally target that we used last week is still in play even though bulls couldn't push this hoax to the secondary pivot at 12,271. The futures got  close enough, however, to warrant a 'mechanical' bid at 11,734. A low on Thursday at 11,736 could have been used for this purpose, and a trade initiated there went on to produce a hypothetical gain of about $1200 per contract. We'd be getting sloppy seconds if the December contract revisits the red line, but my gut feeling is that any overshoot would not reach the stop-loss at 11,376. Even so, I'll suggest using an rABC set-up on the five-minute chart or less to trigger the trade. The 'A-B' segment should be between 200-250 points. _______ UPDATE (Oct 19, 1:05 p.m. ET): The downtrend is closing on p=11,734, where it would trigger a 'mechanical' buy. Here's the rABC I'd suggest using to initiate the trade once p has been touched. Attempt this trade only if you understand why the initial theoretical risk per contract would be around $628; and at what level you would take a partial profit. ______ UPDATE (Oct 19, 8:45 p.m.): The trade detailed in the update above included a graph with the precise rABC set-up to use, and it could not have worked out more perfectly. This gambit produced a gain of $780 per contract in less than 30 minutes for anyone who followed my simple advice. That is the profit on just one contract acquired at the green line and exited at the red. If you'd held four contracts as we often do, and exited at the pattern's D target (where the move topped precisely), your profit on the position would have been $9440.  Since no one mentioned this trade in the chat room, I assume that

Continue to bid for Nov 20 140/150/160 call butterfly spreads, since the ambitious rally target at 151.94 remains valid despite last week's punk performance. (Officially, we hold the spread eight times, effectively for free.) Although the target may seem remote at the moment, bulls could cover half of the white space on the chart in mere days if Trump wins, as I have given you to expect. The spread traded down to 0.32 on Friday, four cents above our niggardly bid, but you can lower it to 0.24 on Monday, subject to possible adjustment intraday. Be sure to tune to the chat room and keep "Notifications" switched on in your account page, since it may be possible to leg into the spread for free. That would entail buying Nov 20 140 calls when the stock is at a downside target, presumably bottoming; and then shorting two 150 calls on any subsequent rally while buying a 160 call.  Please note that the one-hour lesson on butterfly spreading that I recorded a short while ago can be found linked on your account page. You should review it before participating in this trade. _______ UPDATE (Oct 19, 2:13 p.m. ET): Cancel the bid for the butterfly. It has traded down to 0.26 today, but we may be able to do much better by legging it on in the way described above. _______ UPDATE (Oct 20, 6:04 p.m.): For detailed tips on how to leg into the spread, check out the recording of today's online 'requests' session. It should be posted to your account page by mid-day Wednesday if not sooner. _______ UPDATE (Oct 21, 11:20 p.m.): Few investors share my confidence that Trump will be re-elected, and that will seriously impair the ability of AAPL to rise by the usual leaps and bounds