Wednesday, May 8, 2013

The gap through the 149.23 target implies that DIA is a strong bet at this point to achieve the 155.30 target of the 'extension' pattern at the right-most edge of the chart (A=137.60 on 2/25; B=148.66 on 4/11; and C=144.24 on 4/22). I'll suggest staking out a speculative short if and when DIA gets there by buying four out-of-the-money puts with a June expiration. I'll provide further details if and when the target is closely approached, but at the moment, my Tradestation option grid is kaput. Traders should position from the long side between here and around 153.50. _______ UPDATE (May 22, 11:48 a.m. EDT):  The futures vaulted to an intraday high at 155.14 before selling off sharply. Accordingly, I am going to track four June 152 puts @ 1.00.  For now, tie them to a stop-loss at 0.88 against an order to sell two @ 1.14.

We pored over the lesser charts in the chat room yesterday morning looking for low-risk opportunities to get short. Alas, a minor rally with a 1622.00 target fell a tick shy, denying us the easy opportunity we'd sought. This may have been for the better, however, since a far more important rally target sits just above it. (The topmost green line provides the exact number, although, for reasons given here earlier, I'd prefer not to mention it explicitly in this tout.)  Camouflageurs, including night owls, should look for shorting opportunities now, but if the futures blow past the target on the opening bell, 1640.50 (A=1476.25) would be the next opportunity. Traders should exercise a bullish bias at any point in-between.

Traders should ponder the many beautiful crags and crevices on the 18-second (!) chart accompanying this tout.  Each is potentially a handhold for us -- if not exclusively, then certainly in a way that limits competition so that we will have entry points that are relatively easier to exploit than in the past. Charts divided into sub-minute intervals are a new Tradestation feature, and their appeal is dazzling. For me, at least, the hard part will be getting used to trading from the short side, since our strategies in gold and equity shares have generally had a bull-market bias. If you're signed up for this morning's weekly tutorial session, please come prepared to trade.  If not, and the art of 'camouflage' trading sound appealing, consider taking the Hidden Pivot Webinar in June. For further details click here and use the code 7D5629 for a $50 discount.