Monday, December 8, 2014

We used the 63.14 target shown to get short on Friday. For guidance purposes, I'll track sixteen December 20 61 puts purchased for 0.18, since that's what I did in my own account. But you should let me know in the chat room if you did better or worse, since no recommendation of mine will ever assume that subscribers were filled at the best possible price.  I'm going to tie the position to a 0.09 stop-loss for today, but the order will be o-c-o with another to short 16 December 20 60 puts for 0.18. If successful, we'll have on a $1 vertical bear spread with the potential to produce a $1600 gain without risking a dime. Please note that if the stock pushes above 63.14, a larger bullish pattern would be in play that projects to 64.20 (weekly chart, A=50.25 on 10/11). I plan on shorting even more aggressively there regardless of whether the existing put position has gotten stopped out. _______ UPDATE (December 9, 10:24 a.m.): This morning's nasty swoon down to 61.58 made it easy to leg into the riskless spread suggested above, since the Dec 20 60 puts trade as high as 0.25. I'll record an official price of 0.23, based on a report of a 0.25 sale in the chat room. If you didn't so quite so well, please let me know and I'll lower the tracking price.  For now, do nothing further. The stock still looks like it's consolidating.  We have a shot at a $1600 gain on further weakness, but if JPM reverses and heads higher between now and next Friday, as seems likely, there'll still be at least a small profit in the trade.  ______ UPDATE (December 10, 5:54 p.m.): After posting a note in the chat room, I exited the spread

Apple struggled so hard to go lower last week that we should consider getting long at the 113.21 midpoint support shown. A reversal from that price is logical if we expect the long-term bull to remain dominant, as we most surely do. To limit risk, I'll suggest buying four December 12 116 calls if and when the stock gets within 0.04 of the target. You're less likely to get ripped off if you track the option bid/asked once 114.00 is hit on the way down. Try to position your bid so that it's midway between the bid and offer, and stop yourself out of the position if the calls trade for 0.15 less than you paid for them. I'll be in the chat room till around 11 a.m. EST if there are any questions about this.

Just eight points of upside remain until the futures hit something solid -- i.e., the 2084.75 target shown. The excitement could be over by the time you read this, but night owls should seize the opportunity if the futures open unchanged to slightly higher Sunday evening.  If not and there's a pullback to the 2073.00 midpoint pivot, that too can be used to get aboard -- either with a tight stop-loss for a multilot position, or one at 2070.00 if you fancy a 'mechanical' entry on a single contract.

What's the difference between a flood tide and the bull market? The answer is that flood tides recede. Not this bull, however. Having long since decoupled from economic reality, the bull market that began in 2009 will soon enter its seventh year, presumably  accompanied by new record highs that have become almost as predictable as the next sunrise. This is occurring even as the U.S. economy continues to languish in what we euphemistically refer to as the Great Recession. When a reporter or pundit uses that term, the not-so-subtle implication is that the recession has yet to end for most middle class Americans. Workers have said as much when polled -- not that Wall Street seems to have noticed.  The last few years have been an orgy for financiers, paper-shufflers and deal-makers in the U.S. and around the world. Exchange-listed companies have joined in the revelry, promiscuously borrowing untold billions for stock buybacks that push earnings per share higher without generating a dime’s worth of economic growth. How long can the stock market continue to rise parabolically when the economy behind it is too feeble to boost incomes or create good jobs? No one can say for sure, but the spectacle has become wearying for those who have yet to have their boats floated, of which there many.  Their ranks will only swell as the largest tax hike in U.S. history, deceptively named the Affordable Care Act, hits more and more households. Not surprisingly, Obama suck-ups in the news media continue to ignore the deepening disaster, or to mischaracterize it with brazen lies such as this one, in the Boulder Daily Camera: “Coloradans are finding what appears to be a pleasant surprise: Average premiums are only increasing by 2 percent. The Affordable Care Act’s naysayers predicted ‘double-digit’ spikes or worse.”  Two percent??