Rick’s Picks

Judging from the way bulls blew past p=10,192 midpoint resistance last week, there can be little doubt that they will reach the 10,656 target shown.  The impulse leg is strong enough that we could consider a 'mechanical' bid on a pullback to p, using a 10,038 stop-loss. Since that would risk an initial $12,320 theoretical on four contracts, we'll need to look for an alternative entry tactic that would cut that by perhaps 90%. Using call options in QQQ would be the cheapest way to go, but you should let me do the interpolating when the time comes. ______ UPDATE (Jul 7 9:02 p.m.): The futures fell nearly 200 points after recording a high inches above the 10,656 target. The penetration of this Hidden Pivot resistance to the upside implies the weakness that followed is merely corrective.  _______ UPDATE (Jul 9, 9:55 p.m.): The odd pattern shown in this chart is all we've got at the moment, but its 10858 target looks good enough for government work. That means taking a small, speculative put position if and when the futures get with 4-10 point of the target.  You can interpolate using QQQ, which has an equivalent target at 264.56. 

I'd suggested buying July puts expiring next Friday (July 17)  for under $1.00 if DIA rallied to 260.88. This was a difficult trade, since the opening bar occurred on a gap past that number, followed by an hour of hovering that pushed the July 17 240 puts from $1.02 in the first minute to as low as 0.60.  I'll establish a tracking position if I hear from at least two subscribers who got short on my say-so.  Although DIA subsequently dove to as low as 257.88, the puts lost juice ahead of the three-day weekend and traded no higher than 1.18.  They are keepers, nonetheless, since DaBoyz are unlikely to open index futures higher on Sunday night after traders have had a three-day weekend to steep in grim pandemic news. The lunatics will likely be over it by late Monday or Tuesday, but probably not in time to deflate any puts you may have bought as last week drew to a close. _______ UPDATE (July 6, 6:15 a.m. EDT): The usual lunatics and thieves have joined forces Sunday night, goosing index futures into a steep climb. This means DIA will open on a gap equating to a perhaps 400-point gain in the Dow. The short position will remain theoretically viable nonetheless until such time as DIA trades above 267.14. _______ UPDATE (Jul 7, 9:05 p.m.): The short is now profitable, but it was difficult to tell how many subscribers got on board with puts and at what price. I'll track four @ 0.65 as reported by one subscriber, but please let me know if you did better or worse and I'll average the prices. Offer two to close for twice what you paid for them, good-till-canceled.

I'd expected stocks to fall even harder than they did on Friday, especially in the final hour, but DaBoyz did a terrific job keeping the market afloat after around 11 a.m.  Prices chopped their way moderately lower thereafter, allowing the smart guys to distribute stock on a day when the Dow was down more than 700 points. That was quite a trick, actually. Weakness is all but certain to continue Sunday night, but on DaSleazeballs' terms. That implies they will pull their bids and let index futures plummet on zero volume. By Monday's opening bell, with sellers exhausted, it will be relatively easy to touch off a short-covering panic.  That's about as much as I can predict with good confidence at the moment, but we can use the Hidden Pivot levels shown in the chart to exploit swings in either direction. For starters, look for the Sunday night selloff to hit p2=2941.00, a potentially opportune spot for bottom-fishing with an 'rABC' set-up. ______ UPDATE (Jun 29, 950 p.m.): Price action is about as wishy-washy as it gets, although it still smells like distribution. _______ UPDATE (Jul 1: 12:02 p.m.): A subscriber asked in the chat room whether shorting 'mechanically' at x=3084.50 was recommended. I replied that  I'd rate the mechanical short as VERY appealing at a gut level, but very dangerous technically. _______ UPDATE (Jul 1, 9:28 p.m.):  Use this pattern to trade the September contract as it works its way up to the 3175.00 target.  The stall precisely at p=3119.00 could mark an important top, but I doubt it. In fact, this evening's pullback to x=3090.94 is an appealing mechanical 'buy', stop 3062.50.  Similarly, a pullback from 3147.31 to p would offer an excellent opportunity to board the uptrend belatedly.

After being locked in a tedious range for nine weeks, the futures have broken out in an unspectacular way. They are bound for the 1875.20 target shown in the chart, and we shouldn't be surprised if reaching it turns out to be a two-week slog. Getting aboard the uptrend intraday has been tricky, to say the least, but our best bet is with a 'mechanical' set-up. It's a bit much to ask, but a retracement to 1720.10, the green line, would be a back-up-the-truck opportunity. Smaller patterns may give us a chance as well, but we'll have to play it by ear. In any event, you can use p2=1823.50 as a minimum upside target for the near term. ______ UPDATE (Jul 1, 9:44 p.m. ET): The slog I told you expect could at times feel more like the Bataan Death March. Today, for instance. The plunge did not alter my bullish outlook, although it could create a potential tightly stopped buying opportunity at 1766.80. That's a Hidden Pivot midpoint support on the 15-minute chart, where a=1797.90 (8:30 a.m. on 7/1); b= 1767.90 (11:30 a.m.).

I started tracking DIA again thinking it would provide a way to trade the swings without having to use futures contracts. Alas, this ETF for the Dow plays catch-up nearly every day, gapping up or down on the opening depending on what index futures have done overnight. However, the 242.09 target looks ripe for bottom-fishing, notwithstanding the existence of  'structural' support from some lows made near 242 a month ago.  Accordingly, I'll recommend buying four expiring 254 calls if DIA gets within 5 cents of 242.09. That will probably be the lowest strike available for under $1. The order is good for the first hour only. The trade seems likely to survive whatever plunge DaBoyz are able to engineer Sunday night, since the Dow would have to fall more than 800 points to negate it. ______ UPDATE (Jun 29, 9:56 p.m. EDT): The trade detailed above came nowhere near triggering.  Instead, an inside day left no interesting possibilities for the moment.  _______ UPDATE (Jul 1, 12;12 a.m. EDT):  A 'mechanical' short at the green line looks moderately enticing, although I've advised against a similar trade in the E-Mini S&Ps due to the sums involved. In this case, you can take a small speculative stake using Jul 10 puts at the first strike where they are priced under 1.00 (241 should be close). Index futures have already gapped above the green line in night trading, and it's impossible to predict where this vehicle will be at the opening bell. I may be able to sharpen (or perhaps cancel) the trade then, so you should hold off unless you really know what you're doing.  _______ UPDATE (Jul 1, 9:48 p.m.): With a three-day weekend approaching, I'll suggest shifting to the July 17 puts.

A fall to x=346.37, the green line, would trigger an enticing 'mechanical' buy with a stop-loss at 332.58. The initial, theoretical risk on 200 shares would be almost $2800, so this trade is not for everyone. However, mechanical set-ups have been working consistently in this stock, as anyone who has followed my recent touts may have noticed.  I might be able to substitute call options for stock, but please note that the green line should not be used or thought of as a support or a Hidden pivot whence AAPL is likely to bounce, since it is neither. Stay tuned to the Trading Room if you care. Focusing on a much bigger pattern, last week's top an inch from a clear and compelling target at 370.16 is good reason for caution. It could mark the top of AAPL's insane rally, and therefore a possible top in the stock market. The smaller ABCD pattern that had led me to project 385.48 remains sufficiently persuasive nonetheless to keep that target theoretically in play. We'll be better able to weigh the odds once we've seen some downtrending abcd patterns play out. If they easily exceed their 'd targets, it would affirm the bearish outlook. ______ UPDATE (June 29, 9:57 p.m. EDT): The downtrend didn't play out at all, but I don't see the uptrend going anywhere either. ______ UPDATE (Jul 1, 12;23 a.m. EDT): A push above last week's record-high 372.38 would make a further run-up to 385.48 an odds-on bet. _______ UPDATE (Jul 1, 9:55 p.m.): The stock has shown poor relative for two days. Although it may need a pullback for a running start into the next leg up, if weakness brings it down to x=358.09 in this chart, that would trigger an appealing 'mechanical' buy at 358.09, stop 351.27. 

The 10,341 rally target disseminated her last week was narrowly missed, meaning it is still in play theoretically. That implies that a pullback to the green line would set up a 'mechanical' buy with a stop-loss at 9368.00.  I am not recommending the trade, however, since initial risk would be around $4870 per contract. You might want to paper-trade it anyway just to see whether our long winning streak using these big-picture set-ups continues. If you substitute QQQ calls and actually do the trade, be aware that the green line is not to be construed as a possible reversal point. In fact, it serves just two useful purposes, once of which is to let us know when a 'mechanical' trade has been signaled. _______ UPDATE (Jul 1, 10:04 p.m.): Buyers easily pushed past the 10,193 midpoint Hidden Pivot shown in this chart, shortening the odds that D=10,657 will be achieved. An unlikely drop to x=9960.75 would trigger a 'mechanical' buy, stop 9727, but p itself would become a buying level, stop 10.038, on a retracement that has come from a high very near p2=10424.

AAPL, the most owned and institutionally loved stock on this planet or any other, has turned our longstanding rally target at 370.15 into chop suey, telegraphing still-higher prices to come. Specifically, the stock is an odds-on bet to reach D=385.48, at least, given the way short-covering bears shredded the 359.03 midpoint resistance after the close. Even the sleazeballs who work this stock couldn't avoid a pullback from the secondary pivot at 372.26, since, as we know, all vehicles in all times frames, whether moving up or down and irrespective of the news, reverse 100% of the time at p2 (just kidding, sort of).  Anyway, we'll look for ways to leverage a bullish bias -- not only in this stock, but in all stocks traded around the world, since AAPL is now carrying them effortlessly higher. _______ UPDATE (Jun 24, 7:16 p.m.): Today's hard selloff did not change the odds of AAPL's reaching 385.48.  In fact, the weakness tripped a mechanical buy at p=359.03, stop 350.21. I'd suggest paper trading this one, given that the initial risk is almost $900 per round lot. If it works, it will demonstrate yet again how 'mechanical' trades allow us to go against our fears and doubts. _______ UPDATE (Jun 25, 5:51 p.m.): For those of you who are paper-trading this one, or are in the trade with real money, I'll recommend taking off 25% of the position at a current price of 364.60. That will effectively reduce the cost basis of the 300 shares that remain to 357.17.  Offer an addition round lot to close at 366.70.

Last Sunday night's powerful short squeeze was obviously weighing on bears' minds all week, making them too fearful to push the futures lower with any conviction. Friday's session ended with a timid breakdown that triggered a theoretical 'short' to p=3012.88 of the chart shown. We won't speculate on whether it will hold, but if not, that would signal additional downside over the near term to as low as 2869.50. Even so, I'll recommend bottom-fishing at p using an entry tactic that risks no more 1.50-2.00  points initially. _____ UPDATE (Jun 22, 8:25 p.m.): I am just a spectator now and no longer trying to get short, since it feels like everyone else is trying too. I still doubt the futures are going anywhere -- other than down once DaBoyz have finished distributing as much stock as the traffic will bear. That could happen today, tomorrow or next week, but it's pointless to obsess over the question of exactly when. _______ UPDATE (Jun 23, 8:55 p.m.): Wednesday will usher in Day 7 of a skillful distribution by DaBoyz. Conditions are perfect for this, since nothing says 'Buy buy buy!' like the resurgence of a pandemic.  V-shaped-recovery bozos, Kudlow chief among them, took a hit from Fauci, who asserted that the virus would not slow down over the summer. The damage this will do to businesses that are barely surviving is incalculable, and that too was evidently deemed a 'positive' on Wall Street, since it could coax new stimulus from the Guvmint. _______ UPDATE (Jun 24, 7:38 p.m.): There's no reason for speculation or doubt, since the futures' impending interaction with a midpoint Hidden Pivot at 3012.88 should tell us all we need to know.  If the support is crushed or the September contract closes for two straight days below it, that would