What a grind this has been! An unfulfilled correction target at 116.69 still beckons, and so we should be wary about jumping in prematurely, especially since there's no rush to re-establish a long position. You can see that TLT has been pounding a 118.20 Hidden Pivot support for nearly two weeks, providing a modest reason to stake out a speculative long position at these levels. Accordingly, I'll suggest bidding 0.21 for four Nov 14 119 calls. You should make the bid contingent on TLT trading 118.18 or higher, but please note that a decisive breach of the 118.20 pivot would shorten the odds of a washout to 116.69. _______ UPDATE (8:23 p.m.): I heard from a subscriber in the chat room who bought the calls for 0.22, so I'll use that price for a tracking position. Now, offer half of the position to close for 0.44, day order. If you haven't established a position yet, don't, since the options expire on Friday. ________ UPDATE (November 12, 10:20 a.m.): The calls have tripled in price today on an 80-cent rally in the underlying, so subscribers who did this trade now hold half of the original position, effectively with a zero cost basis and no risk. Offer half of the calls that remain for 1.00, then let the last of them ride till Friday, to be exited as you please. _______ UPDATE (10:42 p.m.): Taking a partial profit at 1.00 would have worked out beautifully, since the calls peaked at 1.04. Any calls still held can be handled however you please, since, if you followed my advice, you've already booked a profit on options that have quadrupled in price.
Tuesday, November 11, 2014
Playing with a Rabid Badger
– Posted in: Free Rick's PicksIndex futures are unusually subdued Monday night, hinting that they may be about to assume the demeanor of a rabid badger trapped in grocery bag. My gut feeling is that the next feint will be higher, to a 2055.25 target in the E-Mini S&Ps that I broached here earlier. This is a good number to shoot for if you manage to get aboard (presumably overnight), but it could also make for an opportune short, since the target looks beefy enough to show some stopping power.
ESZ14 – December E-Mini S&P (Last:2034.75)
– Posted in: Current Touts Free Rick's PicksThe 2055.25 target flagged here earlier is looking more and more compelling, notwithstanding the fact that it is of lesser degree than the one at 2037.50 that the futures have been diddling for the last two days. That implies a 25-point ride from here -- one that beckons night owls who have time on their hands and a little guts. The little ABC pattern at the rightmost edge of this chart is the one you should use to get aboard, since it has already tripped an entry signal at 2033.00 that projects to 2039.75. The stall at p=2035.25 is a concern, but if DaSleazeballs are DaSleazeballs I think they are, They are going to run this sucker up in the wee hours. The small pattern won't make you rich if you catch a ride, but that's not the point of it; the payoff is in the potential finishing stroke to 2055. _______ UPDATE (12:29 a.m. EST): The trade worked perfectly, the futures having pushed up to 2039.00, three ticks from the target. If you got long, use a break-even stop and go for extra bases -- i.e., 2055.25 -- with what remains. _______ UPDATE (8:39 a.m.): The futures went nowhere overnight, presumably stymied by the 2037.50 pivot. Yesterday's incredibly sluggish action could have been attributed to the Monday factor. But two days in a row? That's creepy. The most logical explanation I can think of is that every trader on earth was long straddles, or something like straddles, over the weekend. The "unwind" would of course imply a state of coma for volatility, at least until each and every buyer of every put/call has had the marrow sucked from his bones. Owning straddles is like paying life insurance companies extra for an over/under bet on when you'll die. _______ UPDATE
GCZ14 – December Gold (Last:1154.10)
– Posted in: Current Touts Free Rick's PicksNow that sucked, didn't it? We ended the week thinking, ah, at long last, a decent rally in Gold! After yesterday's nasty slide, however, which took back two-thirds of the gain, it's starting to looks like the rally was just a one-day wonder. From a technical standpoint, the very major Hidden Pivot support at 1137.50 flagged well ahead of the low is holding; however, it cannot be presumed inviolate. We'll have to let Mr. Market tell us what is on his evil mind, so it'll be wait and see for now. I cannot predict the outcome, but if a bear-market pivot that took 15 months to reach is smashed decisively after holding for just a few days, that would be dreadful news for bulls. More immediately, the futures would trip a minor buy signal at 1158.90. The relevant pattern is shown in the chart, and although I can feel in my bones that an entry at that price will get you at least to the midpoint pivot at 1171.00, I'd strongly suggest nailing down a partial profit there so that you can still be holding a small long position without much risk. That's what bottom-fishing in a presumptive bear market entails, and we should come to the task with neither hope nor sentimental longing in our hearts.
