Wednesday, July 2, 2014

My intention is to keep riding the rallies and getting short at their respective Hidden Pivot targets.  The short positions face long odds in a bull market now in its 64th month, but if we can limit our losses with tight stops, or perhaps even make a few bucks even when things don't go our way, then why not try? To be candid, and looking at the big picture, with gold, stocks and bonds moving synchronously higher around the world, I suspect that this is not the kind of bull market that will make it possible, let alone easy, for inveterate bears to get short intraday -- especially when stocks are in a ratcheting short-squeeze. More likely is that the 'perfect' short will come at the top of a spectacular spike that has gutted and disemboweled the last of the bears; or perhaps at the end of a quiet day, just before some hellacious piece of news overnight re-orders our lives.

The 350-strike calls we hold for an average 0.47 expire tomorrow (Thursday) , and although they remain a distant longshot, yesterday's $7.45 thrust at least gave them a fighting chance. I'll suggest offering half of them for 0.60, day order, and saving the rest for Friday if AMZN finishes above 338. The chart is a reminder of what we were shooting for in the first place, and how much ground the stock must cover in just two days to put us in-the-money. _______ UPDATE: The stock finished out the week screwing the pooch, and so our calls went to zero. The loss was $188, assuming four held.

Although we were raptly focused on an ostensibly important rally target at 1967.00 yesterday, it proved too challenging to hold onto a short position initiated at that price. A 1968.25 stop-loss survived for exactly an hour before the futures started to move higher again, resuming the tortuous, inch-by-inch short-squeeze that had characterized price action from the opening bell.  We determined to try again at the 1972.50 target of a lesser pattern; alas, the intraday high fell three ticks shy of it, and so we ended the day with no position. We have other targets to shoot at, and also the possibility of getting long on the way to them. Stay tuned to the chat room if you want to be alerted when opportunities develop in real time.

In response to popular demand, I'm going to start tracking silver more closely. "There is a lot of talk on the Internet about silver going up a lot around mid-July," a chat-room denizen averred on Tuesday.  Although I'm not one to be influenced by blogger buzz, if Silver is in fact developing thrust for a moon shot, the evidence should soon become apparent on the intraday charts. Most immediately, that would imply a pop through the p=21.325 midpoint Hidden Pivot shown (see inset). That would open a path to at least 22.070 , its D-target sibling. Gold stalled on a spike Monday at an analogous p, but the fact that it didn't get past it means silver and gold futures are on roughly equal footing at the moment on the bull/bear scale. (Note: The respective p and D pivots for the September contract are 21.370 and 22.110.) I've already stated that the turgid price action of the last week or so looks too much like a consolidation to suggest that anything but higher prices are coming. Those keen on catching the July contract as it leaves the launching pad will need to hunker down on the lesser charts to find a 'camouflage' opportunity. In that regard, yesterday's high at 21.210 was bullishly impulsive, albeit very subtly so. I've identified the tradable ABC coordinates so that you can see just how subtle the opportunity was.  Although the would-be trade failed to reach its D target, it did get to the midpoint pivot -- a fact that would have made the subsequent relapse painless and cost-free for the nimble trader.