Wednesday, January 7, 2015

The Jan 30 126-129 call spreads we legged on at no cost were an easy sale yesterday for 2.25. If you haven't taken a partial profit yet on the 16-spread position, I would suggest doing so now because the ETF is closing on a potentially important target at 133.16 that comes from the weekly chart (see inset). I'll further suggest that you try legging into a put spread if and when the target is closely approached. Specifically, with TLT trading 133.00 or higher, buy eight Jan 30 128 puts. My guesstimate is that you'll be doing well if you get them for around 0.57 cents.  Risk no more than 0.20 on the initial stop-loss. _______ UPDATE (January 8, 9:23 p.m. EST): Subscriber reports have been all over the board, with some traders reporting naked-long positions initiated at the 12/24 low, others spread positions similar to the one recommended. Officially, I'll assume eight spreads still held for a credit of 2.10 -- equivalent to the profit taken Tuesday at what turned out to be the precise high of a two-week rally.  Even after the stiff decline since, the spreads subscribers acquired effectively for nothing are still an easy sale for $2, which is two-thirds of their maximum potential value.  Offer four more of them to close today for $2.10, with 0.15 of discretion.

Gold's upward progress since January 2 has been labored, to put it mildly, but we'll give bulls the benefit of the doubt nonetheless, since they appear to be consolidating this vehicle above the 1216.00 midpoint Hidden Pivot for a push to 1264.60. That implies there's plenty of room to get long for the ride -- a task that would be made easier if you use uptrending patterns on the 5-minute chart to initiate the trade. Just such a pattern was developing Tuesday night, where A= 1215.20 at 7:15 p.m.  An entry signal following a new point C low beneath the one at 1216.00 recorded at 8:25 p.m. would be particularly opportune.

The sharp bounce from within three ticks of the 1985.00 target shown suggests DaBoyz may be able turn the tide today by putting the squeeze to shorts. They may need to manipulate the futures beneath the intraday low first in order to get some running room, so if you're keen on buying near the bottom, I'd recommend using the camouflage technique, looking for the turn somewhere between 1982.00 and 1984.