Monday, December 20, 2010

We should require nothing less than a 123^02 print today before inferring that the two-day surge into week's end was more than a dying-cat bounce. A rally to that price would surpass a tiny (aka look-to-the-left) peak made on the way down last Tuesday, renewing and solidifying the bullish impulse thrust recorded on Friday. Bears had better dive for cover if this occurs, since the squeeze will only just be starting.

We’re long 800 shares with a cost basis of 14.27 against eight January 34 puts held for 0.77.  We missed shorting Jan 32 puts against the position on last week's weakness, but we'll stick with the strategy. Continue to offer eight January 32 puts short for 0.72, good till canceled.

We continue to hold four January 111 puts for 0.97.  My short-term bias is slightly negative, since the Diamonds have been working on a bearish impulse leg since Thursday. For now, do nothing further, but please note that the downtrend would need to touch 113.76 today to refresh the bear trend.

Ever so coy, the futures crept up on Wednesday's 29.495 peak Sunday night, only to recede moderately after merely tying it.  This timid action is reason enough to raise the bar, so we'll stipulate that the futures must exceed a second external peak at 29.645 (shown in the chart) before we infer that bulls have taken charge.

The 1396.20 print we were using last week as a bullish trigger can still serve in that role, although as of Sunday night, the futures need only hit 1387.40 to turn the hourly chart moderately bullish.  The implied breakout would be too obvious to afford us camouflage cover, but if it's only by a tick or two followed by a b-c pullback like the one shown in the chart, that could provide a low-risk opportunity for attentive night owls.