Goldman Sachs

We've waited patiently for the stock to reach a long-term rally target at 149.42 (see inset).  It is nearly there, and to get short I'll suggest buying four March 145 puts when the stock is within six cents of the target. The calls settled at 3.53, but it's difficult to estimate where they'll be trading with GS $2.30 higher.  We'll risk $100 theoretical on the trade, stopping ourselves out of the options if they trade for 0.25 less than we've paid for them. _______ UPDATE (12: 10 p.m. EST):  We'll use 2.75 as a basis for four March 145 puts. This is toward the high end of the buying range reported in the chat room. Let me suggest a rigid, uniform stop-loss for all players at 2.25. This is more than the $100 I'd intended to risk initially, but Goldman's rally just seems so miserably STUPID at this point that we'll want to give our short position just a little extra room.

From the obvious pattern that hits the eye when you look at Goldman's daily chart (see inset), I've culled a less obvious one that looks like it could produce a shortable top.  The Hidden Pivot target where we'll attempt to do so lies at 143.35, and I'll suggest buying four February 140 puts if the stock should get within 15 cents of the target. To manage the risk of this trade initially, I'll suggest ditching the position if the puts trade for 25 cents less than you paid for them. In theory this will limit a loss to about $100. I am recommending this because if the intuitively obvious pattern plays out rather than the somewhat idiosyncratic one that has seized my fancy, the stock will be on its way to a minimum 149.42 (which will be shortable too, by the way). _______ UPDATE (1:32 p.m. EST): We were stopped out, with subscribers reporting actual losses on the trade ranging from $100 to $125.  The stock is now on its way to the even more promising top at 149.42 mentioned above.  We'll want to short there more aggressively than we did this time, so be ready for further instructions.

There’s no point in pretending it’s those sleazy, child-molesting bullion bankers at Morgan Stanley, Goldman Sachs and  J.P. Morgan who have been pounding on mining stocks and bullion futures in the last few months.  Lately, it has felt like the whole world has been dumping them.  For the record, we are ourselves cautious buyers of bullion futures and select mining stocks at these levels, since many popular trading and investment vehicles that we track are closing on important Hidden Pivot correction targets. (Want to find out the exact prices at which were are doing the buying? Click here for a free trial subscription to Rick’s Picks, including real-time guidance and a 24/7 chat room where the discussion never stops.) When bottom-fishing in markets that have been falling as steeply as gold and silver have been falling, we recall the advice of our friend, the late Malcolm Watts: “When attempting to catch a falling piano,” Malcolm, a PSE option trader and gifted technician, used to say, “wait until it has bounced three times.” (It was not a falling piano that felled our friend when he was in his thirties, by the way, but the stresses of the market on an apparently defective heart.)  So, have bullion futures bounced the required three times yet? By our count, there have been more like four bounces since February. And although that may not mean it’s perfectly safe to buy the precious-metals complex at current levels, it does imply that those who waited are happy they did. By and large, however, precious-metal bulls are probably feeling shell-shocked by now, since many of the stocks that they hold dear  – quality companies like Silver Wheaton, Newmont and Yamana – have been sold nearly to death.  The shares of these firms and many others looked like great

Paying subscribers get to see quite a bit more of Rick’s Picks than lurkers might infer from reading the free commentaries that go out each day to many thousands of readers. A headline that will have caught the eye of the latter was this one, from the May 2 edition: Gold’s Nastiness Hints of a Major Bottom. Comex June Gold subsequently fell $76, and we were therefore unsurprised to receive e-mails from lurkers who evidently had been caught flat-footed by this supposedly unforeseen (by us, anyway) bout of weakness. In fact, the daily “trading touts” that lie behind the Rick’s Picks subscriber wall have been far more cautious than outsiders would likely know. Just yesterday, in fact, we offered a projection for GDXJ, a proxy for junior mining stocks, that may have caused some subscribers’ scalps to crawl. (Click here for a free trial subscription if you want to see just how low we think this favorite of gold bulls could conceivably go.) So which is it:  Are we bullish on gold, as our headlines would seem to imply? Or do we privately shrink from the risk of owning bullion? The answer is that, although we are bullish on gold and silver for the long-term and have been socking away bullion coins for years, we are not so certain that it will achieve the stratospheric heights that some gurus have predicted. However, what we are most confident in saying is that, come hell or high water, gold’s purchasing power will more than hold its own relative to all other classes of investable assets.  We would concede, however, that the fantastic price targets of some bullion superbulls have a few things going for them.  For one, the U.S. dollar is already intrinsically worthless, and that implies that real money – i.e.,

Rick’s Picks occasionally offers option trades suited to novices and experienced traders alike. Typically, these gambits go against major trends, since our proprietary Hidden Pivot System is especially useful for nailing turning points very precisely.  Yesterday, for instance, we recommended buying QQQ June 65 calls if this proxy for the Nasdaq-100 index fell to within a dime of a 63.53 price target. That implied a wicked plunge from  the previous day’s settlement price of 64.76. In the actual event, panicky sellers obliged by pounding the bejeezus out of QQQ on Tuesday. It opened 43 cents lower, at 64.33, on its way to an intraday bottom at 63.48 – just a nickel from the low we’d projected.  This allowed us to buy June 65 calls for as little as 0.98; however, we used an official price of 1.03, since that was the worst fill reported by a subscriber in the Rick’s Picks chat room. Later in the day, the calls rebounded to 1.42 as QQQ trampolined from our downside target. (In the feverish promotion-speak of the guru world, the paper profit on the calls worked out to “AN ANNUALIZED GAIN of 13,800%!!!!!!!!!!”). As QQQ screamed higher, we sent out a bulletin telling subscribers to take profits on half the position. Some reported fills as fat as 1.36, but we used a more conservative 1.25, effectively reducing the cost basis of our remaining position to 0.84. Our #1 Trading Rule Now it’ll be hard to lose, right?  In fact, stranger things have happened. And that’s why we always recommend taking at least a small partial profit early in a trade if possible, whether in stocks, options or futures.  Of the three vehicles, options are arguably the toughest game to beat, especially for the retail customer. We say that after having traded puts

Global Banking System Collapse [We have argued here before that it is lies, systematic fraud and blatant duplicity by the central banks that have kept the global economy afloat in recent years.  In the essay below, a regular in the Rick’s Picks forum who goes by the handle ‘Buster’ provides as succinct and elegant an explanation of this as we have seen. His thoughts were originally published in the forum, but we are reprinting them below because they deserves a wider audience. RA] America is a great country. As with any business, its success is based on the balance of its assets against its liabilities. Its assets are a plentiful supply of natural resources; land & minerals, plus 300 million specimens of the most creative creature on planet Earth. These assets are hindered by one main liability, a ruling class who imported a monetary system of theirs from Europe a while ago. It is a non-free market system which is enough of a hindrance to negate all the positives of any country in time. A simple enough system to understand, yet very seldom understood, even by the most intelligent among us, it would seem. It operates on the simple rule that currency is borrowed into existence with interest bearing on it at a given rate. The critical point to recognise is that the interest owing is not issued by the lender, only the principal, thereby meaning that the interest either has to be paid out of the sum of principal borrowed, or by confiscation of real physical assets, i.e. “real wealth”. The only thing keeping this eventuality from occurring is if a new borrower adds more money, borrowed as yet more debt, into the economy. This is why such a monetary system requires ever more investing manias to perpetuate itself.

The week ended on an encouraging note for bullion investors, but can we trust this rally? Only with caution. Our hunch is that it was a false start and that precious-metal futures and mining stocks will re-test their recent lows.  This puts in doubt a profitable long position we’d recommended  in GDXJ, the Junior Gold Miner ETF.  Our suggested entry point at 23.93 was hit on Thursday, three cents from the low. The number is a “Hidden Pivot support” that we’d disseminated to subscribers when GDXJ was trading above $26. We’d like to think the trade will work out beautifully, meaning an eventual doubler to $50 a share. Even so, we’ve already taken a precautionary step by closing out half of the initial position on the very small paper gain that existed prior to yesterday’s rally. Although we’ve characterized our short-term bearish outlook as a “hunch,” it is buttressed by technical reasoning.  What concerns us most is the heavy look of bullion-sector charts even after Friday’s rally. Indeed, there is such clarity in the larger, downtrending patterns on these charts that their respective downside targets look almost magnetic.  You can see this in the GDXJ chart above – and you don’t need to be a graduate of the Hidden Pivot Course to sense the earnestness of the selling. The ABC price points established a bearish Hidden Pivot target at 22.74 that lies $1.16 beneath the low where subscribers were advised to get on board. Notice as well that the upper red line – what we call a “midpoint support” – appears to have mutated into resistance. Not Goldman Sachs Now, if this were a stock that we love to hate -- Goldman Sachs springs to mind -- we’d probably tell subscribers to reverse their long positions and go short near

[I'm running this commentary for a second day because of the high-minded discussion it has elicited.  Please be aware that an announcement next week concerning the latest bailout for Greece would probably generate a short-squeeze rally on Wall Street, much as it has a dozen times before.  Be that as it may, a potentially important target at 1353.00 that I'd flagged here for the E-Mini S&Ps has held thus far, the futures having spiked in the opening hour yesterday to...1352.75.  In other trading notes, a rally target for Bank of America shares was bullishly exceeded, although two more important ones remain: 13085 for the Dow -- a longstanding objective of ours;  and 119.91 for Goldman Sachs. Taken together, the prospect of simultaneous tops in so many bellwethers suggests that an important trend change could be imminent.  Click here for a free trial subscription to Rick's Picks if you'd like to keep abreast of further developments in real time. RA] The financial world is on pins and needles as "investors" await Europe’s latest, quasi-momentous decision on the fate of Greece. The Greeks themselves, no fools, were a step ahead of the politicians and bankers, rioting in the streets.  Many of them have probably imbibed enough austerity to last a lifetime. Keep tightening one’s belt a notch at a time and eventually you’re left with two bloody torso halves. Not that the bankers would mind the mess as long as they get paid. So what, actually is at stake in this latest chapter of the eurobailoutpalooza? The rescue package under discussion amounts to a piddling €130 billion, and we can’t see how it’s going to make much of a difference. Even if it’s only intended to buy a little time, a sum as meager as that may not see the Eurocrisis through

We'll use the 119.91 target to get short, whack-a-mole style, if Goldman should poke its ugly little head up.  This is slightly lower than the Hidden pivot target given here earlier, but the pattern shown amply supports the new number. I'll specifically recommend that you buy two March 110 puts (or multiple thereof) with GS trading within a few cents of the target. Stop yourself out if the puts trade for 20 cents less than you paid for them. ________ UPDATE (February 22): We'll put this one aside for now, since the stock's struggle to reach the target has become too tedious to command our earnest attention.