Friday, April 17, 2009

With our Dow target at ____ in mind, I recommended buying the _______ 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

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.

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 _____ will not be reached; moreover, if it should be exceeded by more than $1 or so, it would portend further slippage to at least _____.

Join me Friday morning at 11:00 EDT for an informal webinar that will focus, step-by-step, on the option strategy we're using to leverage weakness in Google between now and mid-autumn.  We'll also look at some "live" charts with the goal of finding profitable Hidden Pivot-based opportunities as the week draws to a close. The session is open to all subscribers and their friends.  Fifteen minutes before the webinar begins, I'll provide an ID code and an URL in the chat room that will allow you to access the session.

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

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.      But that doesn't mean they can't be beaten at their game. One Rick's Picks subscriber actually appears to have accomplished this feat Wednesday night while he slept.  We'd put out a bulletin for E-Mini traders, as follows:  "Night owls please note:  A Hidden Pivot at 841.50 looks very enticing as a place to try bottom-fishing. The futures have just bounced precisely from its sibling midpoint at 846.00, so any breach of that support might be expected to bring ES down to  the target." As it happened, the E-Mini S&P was about to make an overnight low at 840.25, a scant point-and-a-tick beneath the target. The subsequent bounce went 14 points, yielding what in retrospect was a highly favorable bet. Several chat room regulars who live outside the U.S. and who are in the room at odd hours evidently took the trade and were cashing out just before stocks greeted the dawn on the NYSE Thursday morning. But our sleepy subscriber managed to bypass the stresses of overnight gyrations, awakening to good news, good fortune, and a good mood that would have done Willard Scott proud:  "Put a buy-stop in just above Rick's 841.50 ES