Monday, August 20, 2012

I have no idea how this stock will open on Monday morning, but if Comex Silver is up $0.75 or less, DaBoyz may try to steal some out-of-the-money calls.  One we might try to acquire, the December 38, was artificially boosted on Friday's close with a 0.79 bid that was four cents above the last sale.  Let's play their little game, perhaps getting in some faces, with a 0.71 bid for eight of them (equivalent to owning 200 shares at current levels) on the opening. Thereafter, the bid should be lowered to 0.67 if the stock is trading below 31.75. _______ UPDATE (10:26 a.m. EDT): Maintain bids today as suggested above. These call are more popular than I'd imagined with the crime syndicate that rigs their price. _______ UPDATE (August 21, 3:25 a.m. EDT): We've got only SLW's dust to choke on at the moment. The stock may indeed be headed to the moon, but because the move is so frightfully extended, the journey will have to be without us.  Nevertheless, if I'm able to find a low-risk entry spot intraday, I'll put out a timely bulletin to those signed up for 'E-Mail Notifications' on their My Account page

Summer-long tedium should have exhausted our patience by now, but we shouldn't lose sight of the fact that immediate prospects are bullish based on the 1652.80 target shown in the chart. Dueling impulse legs on the hourly chart have made getting long an ordeal, but that's where I'd suggest looking if you want to get aboard via camouflage.  As of around 6:30 p.m. EDT, the futures were hovering just above a 1618.25 entry signal tripped on Friday, bound for a 1623.20 midpoint resistance. (60m, A=1603.30 on 8/16 at 9 a.m.; B=1623.00 on 8/16 at noon; and C=1613.30 on 8:17 at 11 a.m.).  To establish an entry point belatedly, I'd suggesting using abc patterns from the five-minute chart or less. ______ UPDATE (August 21, 3:21 a.m. EDT): It would take only a small rally to break December Gold out of the wedge that has held the stock in check since June.  Specifically, a $15 thrust from current levels would push the futures past no fewer than four prior, internal peaks on the daily chart. Granted, it would take four times that to surpass the first true 'external' peak on the daily chart at 1687.40, clinching the bullish case into autumn.  But first things first:  Let's see how buyers handle the wedge before drawing any further inferences. _______ FURTHER UPDATE (August 23, 4:45 a.m.): Long-term bulls should be pleased to see that buyers handled the wedge splendidly. It would now appear that the 1687.40 resistance is a dead duck.

Exit the October 620-Sep 620 put spread for 8.40 or better.  That's what we paid for it, and it has retained its value despite the stock's rise for three reasons: 1) our entry price was rock-bottom; 2) the September 620 puts we are short came under heavy selling pressure toward week's end because the August 620 puts were due to expire; and 3) our October 620 puts have picked up volatility as puts often do when a stock rises.  We can try to reshort the stock again at 659.89, which appears to be where this latest short-squeeze rampage (on earnings guidance, no less!) is headed. _______ UPDATE (11:05 a.m. EDT):  DaDirtballs have short-squeezed the stock to a so-far high this morning of 659.50.  Let's try to put on a bear spread, buying the December 620-October 620 put spread eight times for 14.30 or less.  If you fill, please let me know in the chat room so that I can establish a tracking position for your further guidance. The best way in is to leg it on by buying the December puts at the 'D' target or p midpoint of a minor rally pattern. The next such opportunity would be at 666.10, but don't wait if a timely opportunity should occur before then. (Note:  Even at the  height of today's hysterical short-squeeze, with the stock up $22 from where we initiated the December 620-October 620 put spread, the spread is still an easy sale for $8.)  Click here for a free trial subscription that will allow you to be notified of trades intraday in real time.

We're using a 1480.50 rally target, but with a nervous eye on the fire escape. Most immediately, Friday's bullish fillip looks bound for 1424.50, predicated on a move through its 'p' Hidden Pivot sibling at 1417.75.  The week's high came within a point of that resistance, but if Sunday night's opening should rise above it, especially on a gap, consider 1424.50 a lead-pipe cinch. Camouflageurs searching for a way to get long should stick with the three-minute chart, where some good opportunities were signaled on Friday.  If you're keen on shorting 1424.50 without camouflage, I'd suggest a 1425.75 stop-loss. The target will remain valid as long as the 1410.75 point 'C' shown in the chart endures.  Your shorting odds will be best if the target is hit straightaway, especially on a lunatic gap or breakaway rally Sunday night.  ______ UPDATE (10:26 a.m. EDT): The futures have plunged eight points, or $400 per contract, after topping a single tick from the 1417.75 midpoint resistance noted above. If at least two subscribers report getting short, I'll establish a tracking position for your further guidance.  For now, though, cover half the position near 1410. ______ FURTHER UPDATE (10:56 a.m. EDT): Since some subscribers have reported shorting 1417.75 and covering half at 1410.00, I'll track  a position that is short two contracts (or multiple thereof) with a profit-adjusted cost basis of 1424.75.  Tie them both to a stop-loss at 1417.50, day order, but with an o-c-o (one-cancels-other) order to cover one at 1405.25.