November 2013

A bountiful holiday to you all!  With my extended family in town, I'll be taking Friday off, so the next regularly scheduled edition will be on Monday.

Maybe it's Shatner's winning touch, but Priceline is moving through major Hidden Pivots with such authority that it's starting to creep me out. Granted, the target shown, at 1155, is of dubious provenance, since the point 'A' of the pattern is just a pisher. But it's still good enough for government work, and that means it should have shown at least a little stopping power.  So now where?  I'm never comfortable when I don't have a target, so let's use the one at 1244.20 shown.  That's 67 points of potential upside to trade before you even think about getting short, making this stock a natural if you're keen on trading with the lunatic trend. _____ UPDATE (January 6): The stock has topped for the time being just below $1200. The correction looks bound for a minimum 1121.61, a Hidden Pivot support that can be bottom-fished with as tight a stop-loss as you can handle. _______ UPDATE (January 7, 10:06 p.m.): The stock has shot up more than $50 in two days, but I don't entirely trust the rally, since it is coming off a low that decisively exceeded a clear Hidden Pivot correction target at 1121.61. Regardless, for the time being it should be traded only from the long side, using 'camouflage' patterns that are visible on the 30-minute chart or lower. _______ UPDATE (January 12, 11:05 p.m. EST): More downside to at least 1128.75 appears likely over the near term.  That's a Hidden Pivot midpoint support, and you can try bottom-fishing there with as tight a stop-loss as you can handle. If the support is breached decisively, however, it would imply more downside over the near term to as low as 1089.37. _______ UPDATE (January 22, 11:31 p.m.):  Next major stop on the way higher: 1224.40, a Hidden Pivot

December Gold was treading water late Tuesday night, up a few insignificant bucks. We've come to understand by now that an overnight rally of at least $30-$35 is necessary for there to be any gains left when the day shift gets done with this vehicle.  It's probably a good time to reiterate the bearish sequence of Hidden Pivot targets we've been using in recent weeks: 1212.80 and 1195.40.  Remember as well that there's a bear-market target at 1125.00.  Please note that we could banish such negative thoughts, at least for the time being, were the futures to leap above the 1267.90 'external' peak shown.

Subscribers hold 16 December 400-410 call spreads with a cost basis of 0.40, predicated on a 411 rally target. With 25 days till expiration, a stall or swoon could be fatal to December premium. Accordingly, I'll suggest taking a partial profit if the opportunity arises, closing out eight of the spreads for 0.80.  Mark this offer good-till-canceled.  Nearest Hidden Pivot resistance above: 359.57. If buyers shrug this one off, we'll be in great shape come Monday.  _______ UPDATE (11:17 a.m. EST): The Dec 400-410 call spread was 0.96 bid this morning and currently an easy sale for 0.80, so I'm going to record eight spreads covered for 0.80.  This will allow us to hold the eight spreads that remains for 0.55. That number fully discounts the cost of twelve DIA December 145 puts that we've been holding, in 'straddle' fashion, as an offset.  Total risk remaining: $440.  Incidentally, you should keep in mind that some horrific black swan event could turn the puts into winners. Check my DIA tout for corresponding advice, since the puts still have value. _______ UPDATE ((December 2, 1:20 a.m. EST): To neutralize our risk, offer four of the spreads to close for 1.10, good-till-canceled. This spread was do-able on Friday with a little work.  I am also reducing the cost basis of our spreads to 0.40, since subscribers have reported closing out the twelve DIA puts for 0.10.

Price action centered on the midpoint pivot (p) shown looks sufficiently precise for us to infer that the 1820.25 target will work. That means not only that it can serve as a minimum upside objective for the near term, but that the target can be shorted with a stop-loss as tight as 1.00 point if you are reversing a long position. (Otherwise, you should use  'camouflage' to pare the risk down to a theoretical maximum of five ticks per contract.)  ________ UPDATE (4:32 p.m.):  Zzzzzzzzzzzzzzzz.  No change.

Early Tuesday morning, there were subtly bullish signs in December Gold that were corroborated by price action in December Copper.  Also worth noticing is that gold looked set to clinch a second consecutive daily gain. You'd be surprised at how long it's been since this modest feat was last achieved.

It’s been a while since we’ve seen the futures move higher for two consecutive days, but it looks like the drought will finally end today.  This is notwithstanding the fact that after-hours trading began with a lurch higher that would have trapped more than a few bulls. But the pullback so far has been shallow, suggesting that shorts for a rare change were mildly on the ropes early Tuesday morning. Now, if they can goose this vehicle past the 1263.20 ‘external’ peak shown, then go on to exceed the 1264.00 ‘D’ target, that would set a bullish tone for next week.

The bear side of our straddle, December 145 DIA puts, has collapsed, but we still have a horse in the race via some Netflix call spreads. With the expiration of November options last Friday, the pressure will now be on the Decembers. This week in particular will be critical, since December call premium will get crushed if the stock fails to move higher.

The futures will have a chance to reverse their slide at the 1228.30 Hidden Pivot support shown, but my hunch is that they've been too long in distribution to escape with merely a marginal new low this week. An alternative target at 1222.30 can be bottom-fished with a stop-loss as tight as 1221.90, but I'd suggest limiting contract size to one. Alternatively, if gold surprises with a show of strength, a print today at 1263.30 would turn the lesser charts encouragingly bullish.  Bigger picture targets we've been using that remain to be filled: 1212.80 and 1195.40.