Rick’s Picks

Gold traders have been beating themselves bloody for nearly a month, creating innumerable price reversals slightly above or below prior highs and lows. This kind of price action reveals that the algos, whom I sometimes refer to as droolers, are so hooked on what we call 'impulse legs' that their supercomputers will often be a step behind traders who think like traders and can second-guess dumb machines. The chart reveals a particular telling instance of trend failure -- one implying that we should favor the bears at the moment even if their edge is slight.  The bearish pattern shown has a midpoint pivot at 1880.80 that can serve as a minimum downside target for now; and a D target at 1822.20. (p2=1851.50). _______ UPDATE (Oct 21, 11:53 p.m.): Price action has become extremely tiresome. Here's a bullish alternative to what I've written above, but I offer it without enthusiasm or encouragement; it is strictly informational.

The December contract is trading exactly where it was a month ago, a situation hardly conducive to interesting or profitable forecasts, let alone dramatic ones.  We ended last week with a cautiously bullish target at 25.02, but because gold futures looks slightly bearish at the moment, I'll sync up my Silver forecast with a 22.82 target that is cautiously bearish. That's the midpoint Hidden Pivot support of a pattern begun in mid-September that projects to as low as 19.94.   Alternatively, a pop exceeding the 24.73 'external' peak recorded on the way down last Wednesday would shift the outlook to short-term bullish, and a print at 25.23, especially early in the week, would put 26.40 in play for a finishing stroke. ______ UPDATE (Oct 19, 9:14 p.m. ET): I've had enough gratuitous nuttiness for the time being. I'm going to sit back and watch for a few days. _______ UPDATE (Oct 21, 11:59 p.m.): Like the updated chart in gold, I offer this one without much enthusiasm, although it looks a little better than gold's. A pullback to the green line (24.33) would trip a 'mechanical' buy, stop 23.64, but I'd suggest an alternative entry set-up, since the initial risk would be nearly $3500 per contract.

Two strong rally legs last week failed to push the Dollar Index to p=94.01 . The upthrusts also choked on a fine opportunity to surpass some challenging external peaks, the first of which lay just a tick above Thursday's high. This is unencouraging, but because DXY is on a theoretical  'buy' signal tripped last Tuesday at the green line, we'll give bulls the mild benefit of  the doubt for now. It would take a two-day close above 94.01, however, to put D=95.00 in play. However things play out, you can count on gold and silver quotes to remain exquisitely and inversely sensitive to every uptick/downtick in this vehicle. _______ UPDATE (Oct 20, 6:11 p.m.): Yet another day of weakness wrecked the short-term-bullish pattern when DXY took out its point 'C' low. There has been hardly a bounce, so we should prepare for even lower prices in the days ahead. ______ UPDATE (Oct 22, 12:05 a.m.): The dollar looks so atrocious that just a couple more bad days will wipe out a rally begun from 91.80 on 9/1 that looked like a plausible beginning for a new bull market. Here's the chart.

GDX has been regularly disappointing us for more than two months and is close to doing it again. Although the stock tripped a 'textbook' mechanical buy on Thursday when it pulled back to the green line, it pulled back even more on Friday and ended the week just inches from breaching the point 'C' low of the bullish pattern. I hadn't recommended the trade to begin with because my recent updates placed the burden of proof on bulls. And so it shall remain until such time as buyers can push this cinder block above the 42.54 'external peak recorded September 18 on the way down. I long ago crowdsourced the trading of this vehicle to subscribers because it became an annoyance and a burden to track it. Even so, I will respond to any posts in the chat room seeking guidance for a potential trading opportunity based on the Hidden Pivot Method. _______ UPDATE (Oct 22, 4:47 p.m. ET): Sellers not only destroyed the bullish pattern, they've turned its point 'C' low into a resistance. In any case, I'm relieved to have crowdsourced this cinder block months ago. Lest I tempt you toward despair, however, I should mention that the big picture is still bullish and capable of generating a rally to as high as 51.54. Here's a chart that shows how. _______ UPDATE (Oct 29, 10:47 p.m.): Please give me a nudge in the chat room when it's safe to go back in the water. What a disaster! _______ UPDATE (Nov 5, 9:42 p.m.): With today's strong leap, GDX became an odds-on bet to reach the 43.24 midpoint Hidden Pivot  of this pattern. We'll be able to tell better when it gets there whether buyers have bigger plans, implying a further push to as high as 50.47. _______ UPDATE (Nov

The pullback to p=11,734 and subsequent bounce has brought a bigger, bullish picture into focus that supersedes the minor, bearish one we used a day earlier.  It projects to as high as 12,808, having tripped a 'mechanical' buy signal Thursday at the red line. I'll note as well that a plunge to 11,197, the green line, might seem harsh, but it too would signal a tempting 'mechanical' buy (even if we are unlikely to see this happen).  For now, trade this vehicle with a bullish bias, using the 15-minute chart or less to craft an entry set-up. I would not recommend taking a position home over the weekend, no matter how profitable it is at the bell.

The E-Mini Nasdaq returned to normal on Friday -- i.e., heedlessly over-revved -- by impaling a daunting-looking midpoint Hidden Pivot at 11669 (see inset) and then closing comfortably above it. If Monday produces more of the same, the futures will not only become an an odds-on bet to reach the 12,142 target of the pattern shown, it will also shorten the odds of an eventual rendezvous with the 12,808 target of a much large pattern shown here. There is a 12,271 'secondary' pivot associated with this pattern that you should also jot down, and also a midpoint pivot at 11,734 that is almost exactly where the action came to rest.  The latter has the potential to stop the rally cold, so we should pay heed. I have labeled it 'an interesting place for a pause' because it is.

The top of Friday's 39-point rally came within less than two points of the 3481.75 target I'd sent out the night before. If you got short up there as advised, set a break-even stop-loss for now and cover half if the futures pull back to 3473.00. I'll update my instruction if Sunday's opening is worse than merely weak. Alternatively, targets of a bigger, bullish pattern remain in play. They lie, respectively at p2=3478.13 and D=3571.50. Both are shown in the chart (inset) and, because of an adjustment to point 'A', are somewhat lower than the targets given here previously. ______ UPDATE (Oct 12, 6:26 p.m. ET): A strong, unpaused rally has made a potential short-term finishing stroke to D=3571.50 all but unavoidable. Short there aggressively with a tight stop-loss if you've caught a profitable ride up. _______ UPDATE (Oct 14, 6:55 p.m.): The at times maniacal upsurge of the last few weeks has in fact, and so far, curiously avoided a finishing stroke D=3571.50. This is mildly bearish on its face, but we should give bulls the benefit of the doubt, since the selling over the last couple of days has been quite subdued. This is no reason to give up hope that bears will roar before the week ends, but for now there is no reason to assume the weakness is anything more than a garden-variety retracement. Here's the picture. ______ UPDATE (Oct 15, 5:4 p.m.): Well, dear permabears, there is a growing list of reasons why you should give up hope, since you've accomplished precious little in three days. I've mentioned numerous times over the years that a trader could have reaped a fortune buying any downtrend on its third day. Further proof of this may come soon.

With a 2.5% gain, AAPL outpaced all of the lunatic stocks on Friday save AMZN,  but it wasn't quite enough to push the stock past a prior 'external' peak at 118.83. That would have created a bullish impulse leg and set the stock up for a certain test of supply that is thickest around 120. I'll be looking to get short there via a tight rABC, even if it seems likely that AAPL will eventually punch through. The midpoint resistance at 127.53 would become our minimum upside objective at that point, but even before it reaches that threshold, the 140/150/160 Nov 20 call butterfly we own would start to come alive. We are sitting on 16 of them @0.36, offering half to close at 0.72, good-till-canceled. The spread has a delta value of 0.03, meaning it should gain 3 cents in value for each $1 move higher in the stock. _______ UPDATE (Oct 12, 3:25 p.m.): Subscribers reported cashing out half the position for as much as 0.73 with AAPL exploding to the upside.  Officially, I am now tracking eight remaining spreads that effectively cost us nothing, so no loss is possible. I will leave you to manage the position as you see fit, but be sure to save 25% of it for a potential moonshot, since this  butterfly spread has a maximum theoretical value of $10, which translates as $1,000 in your trading account. This price would obtain with AAPL sitting at $150 when the options expire on November 20, a little more than five weeks from now.  A lot could happen between now and then, but the target will remain valid as long as the stock does not exceed C=103.11 to the downside. _______ UPDATE (Oct 15, 5:42 p.m.): Bid 0.28 for 16 more butterfly spreads, day order,

Gold will need a couple more days like Friday, went it shot up $41, to signal the likely end to the consolidation begun in early August from a record 2089.20. Specifically, an 'external' peak at 1983.80 recorded in mid-September must be exceeded to generate the first bullish impulse leg on the daily chart since July. The immediate potential thereafter would be to 2050.60, the midpoint Hidden Pivot resistance of this pattern; and eventually to D=2250.10. All of this will of course depend on the dollar, whose weakness would turn ugly, if not to say impulsive, if it starts the new week as badly as it ended the last. _______ UPDATE (Oct 14, 7:35 p.m. ET): Bulls are working MUCH harder than bears to push this vehicle around. Even after struggling for altitude over the last 30 hours, they have yet to recoup losses that the bad guys inflicted on gold in a mere 90 minutes the day before. Price action has been too tedious to monitor closely, but I will recommend nonetheless that you bottom-fish at p=1895.20 (click here for chart) with as tight a stop-loss as you can abide. An rABC set-up with a very short A-B leg  (i.e., 8 points or less) should be suitable for this purpose. If the trade gets stopped out, it would shorten the odds of a further fall to D=1872.90. _______ UPDATE (Oct 14, 10.09 p.m.): The 1895.20 pivot worked out exactly, to the tick.  Here's the chart.  If you bottom-fished there, even a one-tick stop-loss would have worked. Your profit at the moment would be about $2600 on four contracts. Exit half and manage the rest at your discretion. _______ UPDATE (Oct 15, 8:09 a.m.): A few subscribers reported jumping on the trade in the chat room and making substantial gains. I'm