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Black Box
Forecasts: "Six hours ahead of its time" Racking Up Gold ProfitsTRADING NOTES: I owe a debt of thanks to my colleague John Seckinger for getting the last two editions of MarketWise Black Box out to you. I've been laid up since Sunday with a nasty strain of flu that seems to have come home last week with my eight-year-old from Superior Elementary School. So why hadn't I gotten a flu shot earlier, like thousands of others in the Denver area? Simply because I've experienced flu only once or twice before in my life, and because dumb luck supposedly plays a key role in determining whether a flu shot will work. If it's matched to the strain of flu that actually turns up when the virus season begins, then the vaccine will be effective; if not, then you will have little or no protection. My wife took the precaution of getting inoculated a few weeks ago, however, and so far has not shown any symptoms of contagion. That's enough to make a believer out of me the next time around. With "Seck" tending to my positions, there were only two significant adjustments that needed to be made, both involving profit-taking. The first entailed the sale of a round lot from the 300 share position we held in Goldcorp. Our cost basis for the stock had been reduced by earlier, judiciously timed trades, to around $5, so the recent sale above $18 allowed us to book a theoretical gain of nearly $1,300 on q hundred shares. This means that our basis cost for the 200 shares of GG that remain is effectively a negative number, 1.31 - i.e., if the stock were to fall to zero tomorrow, we would still have an accrued gain on paper of $262. Of course, Goldcorp is actually trading around $18, so our unrealized paper profit on what's left of our never-very-large position is nearly $4,000. The other position adjustment involved some profit-taking in Hecla. We were holding five December 7.50 calls with a cost basis of zero, so Wednesday's exit was pure gain about $475 worth, which we can add to cumulative paper profits approaching $20,000 for the relatively small positions we've carried in the miners over the last year or so. FYI, the Hecla calls sold for 0.95 on the opening, not too far off an intraday high of 1.10. And now, since I'm anxious to regain my bearings, and to update my recommendations, I'll launch right into it without further adieu. *** Next Week's Online Seminars Next week, for the first time, MarketWise Trading School will offer an online course geared to advanced users of the RealTick trading platform. The two-day session will delve into some of RealTick's more sophisticated analytical tools, including HotTrends and Market Gauge. Additional material will cover the Turbo Options platform in detail, as well as "pairs trading" setups using RealTick charts and the Level II execution screen. The course will be held on December 10-11 from 9:30 to noon EST. The second course, scheduled on the same days, but from 4 p.m. to 7:30 p.m., is entitled "High Probability Trading the MarketWise Way." In this course, instructor Sam Seiden will teach you how to precisely identify momentum changes that enable one to establish positions with relatively low risk and high potential. To register for these course, or to obtain more information about them and other MarketWise online seminars, please go to the following URL: http://www.marketwise.com/MW_main/Calendar_OnlineC.asp A Free Event MarketWise's schedule of free online seminars continues next week with a presentation by Brian Shannon concerning how to identify the building blocks of a trend. The one-hour seminar, slated for Tuesday, December 9, will begin at 9 a.m. EST, allowing for a real-time demonstration of how this method can be used to identify opportune trades during the opening. To sign up, please go to the following URL: http://www.marketwise.com/MW_main/FreeLEvents.asp *** [The + symbol means we have an open position, while $ means there is actionable advice.] $ DEC DJIA
(9870):
There are two hidden-pivot targets just above, the lower of which
will serve for now as a minimum rally target: 10023. If that
number is exceeded by more than 3 points, however, you should
infer that the uptrend will continue at least to the next hidden-pivot,
10119. You can short either objective at your complete discretion,
but I'd risk no more than small change on the initial stop-loss. DEC BONDS (111.04): A rally to as high as 114.00 is projected for the next 2-4 weeks, but first a less-daunting series of hidden-pivot obstacles must be cleared. They lie respectively at 109.10, 110.19, 113.06, and any penetration of one of those numbers by at least an eight-point (i.e., four ticks) will imply the next is likely to be reached. OEX (524.42): My minimum rally target for the near-term is 535.31, a hidden pivot where we'll attempt to go short by way of acquiring some January 530 puts for a bargain price. (3.30 apiece would be just such a bargain for the Jan 530 puts, although we're not likely to see the OEX rally to our target today.) Stay tuned. QQQ (35.25): Nothing compelling
to advise. If the pullback begun yesterday afternoon seeks out
the nearest run-of-the-mill Fibo level, we could look for support
near 34.62. DEC NASDAQ E-MINI (1418.00): Despite the flame-out in the final 90 minutes of yesterday's session, a hidden-pivot rally target at 1467.50 remains theoretically viable. No action is warranted. *** INTC (33.34): Intel has died without having quite reached a hidden-pivot target at 35.81. Now, a print below 32.89 would create a minor, bearish "impulse leg," but it would not be tradeable via instructions that I could formulate a day in advance. FNM (70.16): We didn't get another close below 70, and the tight range continues. Nothing here. $ C (47.22): The closest hidden-pivot support lies at 45.77. Let's try bottom-fishing with a 45.78 bid for 200 shares, stop 45.74 (!) $ + GG (18.23): We hold 200 shares with an effective cost basis of minus $1.31 per round lot. (See today's Trading Notes, above, for an explanation.) Our 16.53 bid for 200 shares was left choking on Goldcorp's dust. Today only, acknowledging the increasing difficulty of bargain-hunting in the bullion sector, let's raise the bid to 17.53. $ + HL (8.41): We closed out our long position in the December 7.50 calls for a trading profit of $495. Let's try to re-establish our long position by bidding 1.90 for sixteen June 7.50 calls. Make the order g-t-c. + RANGY (17.06) We hold 400 shares with a cost basis of 9. No adjustment is warranted for now. RGLD (22.80): We hold 300 shares with a cost basis of $8.84 per. This is a buy-and-hold proposition, one in which we'll persevere until $30 has been surpassed before we do any profit-taking. Continue to sit back and enjoy the wait. IBM (90.75): IBM continues to meander within a tedious range. If the pattern continues we should expect the stock to pull back to around 88.50 over the next few days. EBAY (55.24): eBay's most recent
thrust has mildly bullish implications going forward, since the
rally peaked above a prior high at 56.55 that was recorded on
November 13. This created a bullish "impulse leg,"
and the start of a follow-through leg of equal magnitude would
be signaled by rally of at least 1.60 from no lower than 53.12.
Judging from the weightiness of stochastic indicators associated
with the 100-day chart, it would appear EBAY may need every bit
of that pullback room to regain traction. ***
Past profits are not indicative of future profits. Copyright
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