Just a reminder that we own the September 270 – July 510 strangle for 13.20, having legged into it just as volatility was going comatose. Now, however, Google seems to be reviving, turning the call-option portion of our position from a distant longshot into a mere longshot. I’m not suggesting buying any calls right now if you did not hold them originally, but it’s time to notice that the 15% rally needed to push our calls into-the-money is not so farfetched.
From the monthly archives:
July 2009
A compelling Hidden Pivot target sits not far above, at 68.35, but if it’s breached by more than 6-8 cents expect the rally to continue to at least 68.99. The lower number looks like the better place to try shorting, since the higher is too close to a whole number where at least moderate “natural” resistance will be anticipated. _______ UPDATE: The futures topped at exactly 68.99 before retreating sharply. In retrospect, the safest trade would have been a long from above 68.35. In reality, anyone who followed my advice would have lost money shorting the lower of the two pivots given, though not the higher.
Unlike the banks, IBM still makes money the old-fashioned way, selling services and products. It has had quite a move from March’s lows near 83, but the rally could end at 127.12, a Hidden Pivot. Keep that number in mind if you’ve got a long-term position in the stock or would like to try shorting it.
The already maniacal pitch of Goldman’s rally has turned parabolic, suggesting that the rally could soon reach a blowoff top. We impede its progress gingerly if at all, but even so, the pattern shown in the accompanying chart is clear enough to warrant a short at its 173.10 Hidden Pivot target. I’ll leave this trade to your designs, but officially we’ll look to buy two September 160 puts if and when the stock gets within 10-15 cents of the target.
Because the dollar is in such crucial territory, we should monitor it very closely in the days ahead. Most immediately, we should note that DXY is forming an abc uptrend that will require a decisive push past a 78.97 midpoint to “actualize” the promising bullish impulse leg created in the last two sessions. The pattern is shown in the accompanying chart, and it projects to as high as 79.33 over the near term. If the dollar, now perched at the edge of an abyss, is about to turn higher, it should have little trouble reaching the latter number and then pushing past it, presumably the same day. _______ UPDATE (11:18 a.m.): DXY has bounced weakly after tiptoeing to the very edge of the abyss, testing the support of June’s key low in a way that hardly inspires confidence. The support looks likely to fail.
The quick brown fox…
Bureaucracy, Taxpayers Headed for a Collision
The headline atop the front page of this morning’s Boulder Camera suggests a city struggling diligently to balance its budget: “Work-Week Options Eyed”. Reading this, one might infer that the city is contemplating unpaid furloughs or some other means of reducing payroll outlays, right? That would be entirely appropriate, given that Boulder faces a $5 million budget shortfall next year. But that is not what the story is about. In the first place, it is not the city that is “eying” changes in the work week, but the workers themselves. And what they have in mind is nothing so onerous as unpaid work days…
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Why Gold Should Anchor a Portfolio
(Following is the fourth in a series of articles on gold by Chuck Cohen, a financial consultant and lifelong resident of New York City.)
Recently I discussed some of the reasons investors often fall short. Today I want to help bring clarity to your investment goals and also explain why gold should hold a central place in your portfolio. If you succeed in these two areas, you’ll not only prosper, you will also be prepared for the incredible changes and shocks that I believe are coming.
As Richard Russell always stresses, succeeding in the stock market is a lifetime learning process. At age 84 or so, he is still working diligently at it. As we have all learned, making money in the stock market is not as easy as the hucksters would have us believe. Success comes not just from market knowledge but from learning from our mistakes. And it is…
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Fed Throttles Back, Having Achieved Little
The stock market carved out yet another bowl-shaped formation on the intraday charts yesterday, making everyone who bought the dip a lucky winner. Stocks have swooned in four of the last five sessions and closed higher for six consecutive days, but yesterday’s swoon was a little more dramatic than the others. Some attributed the selloff portion of the day to mounting concerns that President Obama’s tax proposals will soak not only the “rich,” but the middle class. Whatever misgivings investors may have had about this were…
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Even in Boulder, the News Is Lurid
With the dog days of summer fast approaching, we wondered whether every small-town newspaper in America is entertaining readers these days with the same sort of lurid stories that fill the Boulder (Colorado) Camera. Boulder is not exactly the kind of place where you’d expect to find luridness in newsworthy quantities. Half the people who live here are trust-fund babies who, one would surmise, spend their days hiking the local trails, writing…
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News Unlikely to Deter Bulls
Although two big companies, Microsoft and American Express, reported atrocious earnings yesterday after the close, we shouldn’t expect the news to slow the relentless rise of stocks for long. Investors were obviously blithely unconcerned about earnings on Thursday, showing their eagerness to buy stocks by pushing the broad averages to their most impressive gains in nearly two weeks. The S&Ps settled at 976, up 2.3% on the day, and looked like an even-money bet to achieve their biggest back-to-back weekly gain since…
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A Hidden Pivot target at 9168 offers an enticing opportunity to get short today with a stop-loss as tight as 5-7 points.
As California Goes, So Goes the Nation?
by Rick Ackerman on July 27, 2009 12:01 am GMT · 9 comments
As California goes, so goes the nation? We had better hope not, since the state’s economy is imploding so swiftly that it threatens to take cities and towns from Eureka to San Diego down with it. Consider the plight of El Monte, a city of 125,000 in Los Angeles County that recently cut expenditures to the bone in order to close a $9.5 million budget gap for the fiscal year begun in July. Working frantically against an inflexible deadline, local officials furloughed most of the city’s 375 workers, laid off 17 police officers and closed down an aquatic center for all but four months of the year. Then they got the bad news: Sacramento » Read the full article