Thursday, July 24, 2014

There are several minor ABC uptrends driving September Crude right now, and the next logical upside target is the 103.85 Hidden Pivot shown.  It was calculated by sliding the point A low down a tad, since the 103.33 rally target projected from A= 101.13 was very precisely spent as of Tuesday. Above 103.85, a 104.70 target will be in play, based on a higher B-C of 103.45/101.79.  I view all of these numbers as tradable in some fashion, since crude has been moving very reliably and exactly to our targets lately.

A subscriber reported success yesterday legging into the 1340/50/60 August 16 call butterfly that I'd advised. He did so 32 times at no cost, as suggested, but it took a $10 move in the stock between legs to get filled so advantageously. His maximum profit would be $32,000  with the stock trading at 1350 come August 16.  Since he owns the position without cost, no loss is possible even if PCLN should all to zero or rally to $1000. We'll do nothing further for now, but I'd suggest that those of you who were unable to buy the spread keep trying.  We'll shoot for a partial profit if the stock rallies $40-$50 in the next few weeks but otherwise do nothing further. I've reproduced a chart that shows why our expectation of a $120 rally from current levels, to a 1358.18 Hidden Pivot target, is not exactly farfetched.  To that end, a pop above the 1270.59 midpoint pivot would be most encouraging. ______ UPDATE (July 28, 7:46 p.m. EDT): Yesterday another subscriber reported legging into 'free' butterfly spreads as suggested. Keep trying for at least one more day if you haven't yet acquired a stake, since the spread will remain cheap as long as PCLN doesn't blast off.  ______ UPDATE (August 3, 6:10 p.m.): Several subscribers reported success legging into the 'free' butterfly spread as suggested. The position is riskless at this point, but last week's selloff has lengthened odds of a big payoff. Priceline will have to show some giddyap in the days ahead to give the spread a fighting chance. _______ UPDATE (August 4, 1:03 p.m.):  With PCLN caught in a vicious short-squeeze, our butterfly is currently BID around 0.90, meaning the worst possible exit right now would produce a position profit for us -- based on 16

I'm tracking a single contract short from 1982.50, based on the following post by me in the chat room at 1:45 p.m. EDT: "Aw, screw it. Just for the hell of it, let's offer a single contract short at 1982.50, stop 1985.25, risking a theoretical $137.50 plus commissions. I'd hate myself if we actually missed a great short up here."  Actually, it looked like we had missed the short, since I'd suggested initiating it at a longstanding Hidden Pivot target at 1984.25 that was missed by three ticks when this vehicle topped for the day at 1983.50 in the first hour. The futures subsequently crept back up to 1982.75 later in the session, and it was then that I advised getting short for the hell of it. We remained short at the bell, but anyone who did the trade is advised to monitor it overnight, and to use the 1985.25 stop-loss suggested. That implies that we are risking a theoretical 2.75 points to stay in the trade.  If we use the fixed risk:reward of 1:3 that I always advise, we need a move our way of at least 8.25 points, to 1974.25, before we implement a trailing stop. (Had we initiated the trade with multiple contracts, we would take a partial profit there on half the position.)  I may suggest an impulse leg-based stop-loss if ESU falls straightaway to 1974.25, so stay tuned to the chat room if you're unclear on how to do this. It is my intention to come out of this trade with at least a small profit even if ESU blows higher, as is likely. That will be possible if we get the pullback to 1974.25, since a 1981.25 stop-loss would become automatic at that point, subject to the substitution of a trailing stop. Meanwhile, I've