Friday, June 20, 2014

DaBoyz were taking as much air out of Comex futures as possible Thursday night, the better to steal paper gold from widows and pensioners who may have come away from yesterday's monster rally eager to unload an asset that has underperformed for all too long. Could they be wrong?  From a technical standpoint, the August contract tripped a buy signal for a shot at 1445.00, a Hidden Pivot target. We can all afford to be a little skeptical about this, but even for skeptics there will be good reason to loosen up and go with the flow above 1342.60, an important 'hidden' resistance whose breach would reaffirm the very bullish price action we saw yesterday.  That's just $20 above the intraday high, and if it's exceeded as early as today, that would attest not only to the power of the rally, but to its potential staying power.

We took a flyer yesterday on some Priceline calls -- a trial run ahead of a new Rick's Picks offering, the 'Friday Jackpot' bet.  This is a highly leveraged speculation using put or call options that are about to expire not in days or weeks, but in mere hours. The underlying stocks that we use include such lunatic-powered high-flyers as Priceline, Apple, Google and Netflix. We've seen those stocks trace out price swings of $30 or more intraday. When that happens, options that can be purchased for under $1.00 can soar to $6, $8, $10 or even more. Yesterday's trade was a bust, as most such trades will be. Subscribers reported buying imminently expiring PCLN 1235 calls that were $30 out-of-the-money for as little as 0.95.  Alas, the calls went no higher than 1.48, then crashed too quickly for an easy exit.  Our standard practice, whenever possible, is to sell half the calls at twice the price paid for them, effectively reducing our risk for the remainder of the day to zero.  At that point traders are holding a free ticket on a 20-to-1 nag.  Not bad odds, since stocks appear to be at least somewhat more predictable than horses. Moreover, we still hold the calls bought yesterday, and even though they died in the stretch, they could conceivably come back to life if the whack-jobs who trade Priceline are feeling antsy on an expiration Friday, as they so often are. I'll be calling the trades in a virtual room tomorrow starting at 9 a.m. EDT. Only paid subscribers will have access to the room, but if you'd like a front row seat and don't subscribe, click here for a free two-week trial, no credit card necessary.