Member-only content. Please Login or get a free trial of Rick's Picks to view.
COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
The option position could have been closed out yesterday for a gain ranging from $800 to $1,200, with the best opportunity coming on Goldman’s dip to 118.65 about 90 minutes into the session. If you still hold the two July-April 115 and 120 calendar spreads (along with a single extra short April 115 call), you should exit it today rather than carry an unhedged position in the July calls into next week. Playing it down to the wire today would be risky, but not without commensurate rewards. Maximum theoretical gains of about $2280 on the entire position would come with the stock settling at $115. The April calls would be theoretically worthless, the July 115 calls would be selling for around 17.30, and the July 120s for 14.70. That profit estimate also reflects a $400 loss on some April 130-135 call spreads and April 90-85 put spreads that we still hold. I’ve included a snapshot of an option calculator that shows how I calculated maximum spread values at expiration. Effectively, with the stock at 115, it values the April calls we are short at zero, leaving the price of the July calls we are long as the spread value.
Much as I try to present the bright side each morning in my Gold tout, there is nothing to suggest that an old target at 845.20 will not be reached; moreover, if it should be exceeded by more than $1 or so, it would portend further slippage to at least 831.30. Both of these Hidden Pivot targets could be bottom-fished with a very tight stop-loss. There is one more hidden support at 866.70 that could come into play, although its close proximity to a key low at 865.00 recorded on April 6 would make bottom-fishing there someone riskier than if the pivot were situated, so to speak, in the middle of nowhere. Alternatively, to effect a bullish reversal on the hourly chart, the futures would need to print above 911.80 today or Monday.
I still don’t see a ghost of a chance that the futures will not hit 871.25, at least, but if they exceed that Hidden Pivot by more than three ticks, brace yourself for more short-squeeze to a minimum 890.50. The first target was originally offered as a good place to try shorting with a very tight stop loss, but the number has been pretty well advertised by now, and some front-running is therefore likely to occur, perhaps catalyzed by your fellow subscribers. Also, the pivot is less than ideal for trading purposes because it coincides with some very important highs made in early February. If settlement today is above those highs, which lie respectively at 869.75 and 871.00, it would hint that bears will remain under pressure next week.
With our Dow target at 8343 in mind, I recommended buying the September 84-May 84 call spread yesterday via a mid-morning post under Intraday Notes. Specifically, I suggested paying no more than 3.45 for the spread four times. Since a subscriber reported in the chat room that he had executed the order at that price, I will track the position for your further guidance. I will also try to maneuver latecomers toward a belated entry, perhaps at an even better price, so stay tuned to Intraday Notes during the day if you’re interested. The purpose of this trade is to alleviate any anxieties from the small short positions we have taken in Microsoft and Google, and to make a few bucks while we wait for this horrid short squeeze to end.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
INTRADAY TRADING NOTES for Friday
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on 6/30 - 7/1. This two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register, click here.
Beating the Sleazeballs While He Slept…
by Rick Ackerman on April 17, 2009 12:14 am GMT
From a subscriber in the chat room, here’s a despairing note to those who would attempt to trade the night session: “Good luck in the after-hours market,” he wrote. “Those mother******s run stops like nobody’s business.” True enough, DaBoyz who work the night shift are a sleazy, talented bunch – the kind of predators who frequent poker lounges in pairs, who fix horse races, and who can arrange “dates” for men who get lonely at 2 a.m. in Albuquerque, Kansas City or Philadelphia. We wouldn’t trust one of these guys alone in the house with our pet lizard, let alone have one over for dinner. » Read the full article