Rick’s Picks

As vexatious as the rally has been, it's time to adjust the 36.90 rally target we've been using upward with a new one at 38.61 (see inset). The pattern has produced just one 'mechanical' buying opportunity that occurred on a sharp pullback to 31.68  two weeks ago. But all retracements since have been too weak to generate a similar set-up.  I mentioned in the chat room that GDX trades almost as viciously as grain futures, and that's why we need to get long only with close adherence to Hidden Pivot rules intended to minimize risk. For that reason, I will leave open the trading of it to whatever opportunities develop intraday. This is a crowdsourced project, so don't be timid about contributing to the effort if you know your ABCs. ______ UPDATE (May 19, 8:36 p.m.): Yes, it's okay to buy a few soon-to-expire, out-of-the-money puts if GDX gets within 0.11 of the target. Don't risk more than you can lose painlessly. _______ UPDATE (May 21, 9:04 p.m.): What a huge surprise: GDX has plummeted without having quite reached a clear and compelling Hidden Pivot target. It remains viable in theory, but you know the drill: two steps up, 1.90 steps back. _______ UPDATE (May 24, 5:15 p.m.): If June Gold is trading minus $4 or higher, you can use the 35.08 midpoint Hidden Pivot shown in this chart to bottom-fish cautiously. Specifically, a 35.10 bid should be employed in conjunction with a 34.97 stop-loss. The order is good for the first hour only, and you should check here and in the chat room to make sure it hasn't been revised. _______UPDATE (May 26, 9:39 p.m.):  Bottom-fishing at 33.74 looks enticing, but it's unlikely to yield an easy winner because it's too close to some May 13 lows that the

Today's trampoline bounce obviously caught bears by surprise, but it would be premature for them to give up. The chart shows that all of the ups and downs since April 30, including today's nasty short-squeeze, have occurred below a small but technically significant 'look-to-the-left' peak at 2975.00 recorded in early March. A key assumption of the Hidden Pivot Method is that to remain healthy, a bull trend must exceed a prior 'external' peak with each new upthrust. It didn't happened here, even if the shortfall relative to April 30's 2972.25 peak was just three points. That's enough to place the burden of proof on bulls at the moment, although I would caution against getting in their way too aggressively.  We should trade on Friday with no strong bias, but also no fear of shorting provided we do it by-the-book, 'camo'-style.

As always, one need only have focused solely on AAPL, the world's most important stock, to see that bears were not going to romp on Thursday. The stock tried three times in the early going to smash a Hidden Pivot support at 302.03 but finally gave up. Too weary to resist the dip-buying multitudes, bears allowed the stock to escape and romp into the close. Bulls are still not out of the woods, though, since they would need to exceed Wednesday's 315.94 peak to generate some heat. With the running start they got just ahead of the close, however, they'll have the benefit of the doubt as the week ends. The nearest Hidden Pivot above lies at 310.36, but it is not of the finest pedigree, so I am recommending shorting there only to Pivoteers who know their way around 'camouflage' entries.

DIA would need to fall by 5 or 6 points to start looking interesting enough to play for a bounce. In the meantime. we'll look to catch a piece of the downside using put options that have gone from extremely overpriced in April to somewhat underpriced now. Specifically, near-the-money puts are sporting implied volatilities of around 30 versus recent actual volatility in the underlying of around 50. Accordingly, I'll suggest bidding 0.46 for four May 230 puts expiring this Friday. Mark the order good for the first 15 minutes of the session only. Although it would take a strong opening in DIA to push the puts down to our niggardly bid, my objective is to get subscribers familiar enough with the option grid that any trades we attempt as the week wears on will seem more familiar. ______ UPDATE (May 13, 9:24 p.m. EDT): We'll give the downtrend wide berth, since it feels like it could snowball.  If a countertrend opportunity were to materialize, the most logical place for this to occur would be near 228.44.  Pivoteers looking for a quick play should plant the low of an rABC pattern there to set up the trade. _____UPDATE (May 14, 10:27 a.m.): The 228.44 reversal target noted above has worked precisely, although the jury is still out on whether it will mark today's low. A subscriber reported covering some puts at the target -- a good thing, since DIA has bounced 1.50 off the low so far. _______ UPDATE (11:12 a.m.): The jury is no longer out, since the Dow Industrials have rallied 460 points and are trading close to 'even' since bottoming a hair beneath my 228.44 target.  I've asked subscribers to let me know if they were able to get long at the low using my instruction. If so,

Buyers had a coronary a millimeter above the 319.43 Hidden Pivot target shown in the chart. It had been three weeks in coming, and we should therefore expect this correction to take at least 3-4 days to run its course. It could turn out to be much worse than that, however -- perhaps even the dropping of the 'second shoe' that we have all dreaded.  If so, expect to see minor abc downtrends start breaching midpoint Hidden Pivot supports and exceeding their 'd' targets. The lesser charts will be a good place as always to assess the trend strength, and to temper our enthusiasm for bottom-fishing merely because we've become habituated to the stock market's nutty buying spree. As the downtrend starts to lengthen, assuming it does, we may be able to trade against the trend with risk under very tight control. Stay tuned. ______ UPDATE (May 13, 9:38 p.m. EDT): Sellers looked pretty feeble on day two of the downtrend, failing to achieve even the p midpoint support (301.79) of the first robust abc pattern (30-min, a=315.95 at 11:00 a.m.). Let's see if they can do better on Thursday, when they'll have a Friday finish line to coax them in the direction of the trend.

The futures sputtered out without achieving even the least ambitious of my bullish benchmarks. The targets remain valid in theory, but today's chart is intended to stretch the bearish imagination by emphasizing not Hidden Pivot levels, but a vast chasm below that taunts investors who may have whooped it up a little too heedlessly lately.  En route to the chasm, there are four technically significant lows stretching back to April 21's 2717.25, the most important of them. The others lie, respectively, at  2823.00 (5/6); 2771.00 (5/3); and 2755.25 (4/24). Every one of them is guaranteed to evince a flutter, bounce or breakdown, and so each will likely be be tradeable in some fashion.  If you're eager to test your chops and perhaps make a little money, or to see the Hidden Pivot System at work in real time, stay tuned to the chat room for guidance from the many experts (aka, 'Pivoteers') who frequent the room. Some subscribers will already be short and quite profitable, having acted on a very timely suggestion provided in the Trading Room by 'GDL', who outlined the details of his bearish bet the night before. _______ UPDATE (May 13, 10:02 p.m. EDT): The first 'structural' support in the sequence given above, 2823.00, propagated a 50-point rally. Now please note that the futures are closing on 2771.00, the second number in the sequence. The reason I used the word 'guaranteed' above is that the machines that do most of the trading are programmed to think like human traders, pondering with autistic obsession the dynamic effects of prior highs and lows.

A mildly compelling Hidden Pivot resistance at 2941.50 has brought buyers to heel Sunday night, although we shouldn't expect them to linger for long.  When they push higher, as they will, look for the futures to take on the April 30 peak at 2965.00.  Assuming it too fails as a restraining force, the next logical Hidden Pivot target would be the 2980.75 target of the pattern shown in this chart. There has been one 'mechanical' buying opportunity so far, at 2823,44, but I doubt we'll see another with a pullback to the 2887 red line. In any event, the trade would require a 2840.75 stop-loss. ______ UPDATE (May 11, 4:32 p.m.): It would take a plunge below 2867.75, where an external low was recorded last Thursday on the way up, to generate a bearish impulse leg worthy of our attention on the hourly chart. Otherwise, all will remain as noted above.

The bullish pattern shown, which promised just a few short weeks ago to deliver a run-up to 1873.90, is close to succumbing. Since gold loves to push bulls to the point of despair before turning around, we shouldn't give up on it quite yet, even if the futures stop out longs with a feint below C=1666.20.  If the feint turns into a rout, we'll regroup with fresh analysis. The intermediate- and long-term outlook would remain bullish nonetheless, but we should get used to thinking of bullion's longer-term uptrend as a bullish market, rather than a bull market.  The latter is what we witnessed in the Dow Industrials, Nasdaq and the S&Ps, which rallied almost relentlessly for 11 years no matter what the news. Gold, in contrast, has been mostly marking time,  demonstrating with an oft-tortuous uptrend that the bad guys can no longer punish it for more than a few days. ______ UPDATE (May 7, 9:05 p.m. EDT): Gold's best rally in more than two weeks has given it a running start at the 1770.10 midpoint Hidden Pivot where bulls failed the last time. They'll need to close the futures above it for two consecutive days to make a push to 1873.90. an odds-on bet. That would also activate the pattern itself for 'mechanically' trading the various levels. _______ UPDATE (May 12, 6:56 p.m.): Gold continues to mark time with gratuitous $60 swings. They are tradeable, of course, and entertaining to watch if you hold no position, but no fun otherwise. The bullish benchmarks flagged above will remain theoretically viable as long as 1666.20 is not exceeded to the downside.

Today's chart shows an ambitious target at 3149.00 -- a swing-for-the-fences number that will spare us the annoyance of adjusting upward every time a lesser target is reached. The Dow would be trading within 10% of all-time highs at that point, the S&Ps within 7%. This may sound farfetched considering the state of the economy, but I'd lay even odds on this bet for three reasons: 1) the A-B impulse leg is the real McCoy, having exceeded a daunting external peak recorded on March 10; 2) the B-C leg has traded above the 2933.25 midpoint resistance; and 3) Friday's downdraft triggered a 'mechanical' buy, albeit a weak one.  All things considered, the pattern suggests 3149.00 has a good chance of being reached, perhaps after a struggle that could take 7-10 days. I am not putting out that number to you just so that you can obsess over shorting it. It is intended to open your eyes to bullish opportunities as the futures move higher. ______ UPDATE (May 6, 5:30 p.m.): Big players sat out the round, presumably amusing themselves while scalpers and day traders spent the entire session kicking each other in the nuts. As much was predictable when overnight action bogged down in tedium, as though there were nothing of interest going on in the real world. It also came as no surprise when the trading world's midgets an dwarves sent the futures into a gratuitous dive in the final hour. Please wake me when technical traders and machines programmed by nerds who have never traded anything in their lives have burned themselves out and price action returns to abnormal, the way we like it. _______ UPDATE (May 7, 9:25 p.m.): The futures are bound for a minimum 2929.00, the likeable target shown in this chart. If I say