Da Boyz sandbagged the rubes who bought yesterday’s opening. Buying dried up after about ten minutes, then it was down, down, down for the rest of the day. I’d left you with an order to buy August DIA calls that got filled suspiciously easily, but instead of blowing them out when the market began to tank, we turned the position into a strangle by buying some August puts. This “backspread” will work for us regardless of whether the stock market rises or falls, as long as it does not move sideways. That seems unlikely, given the nervousness that has pervaded securities markets lately, as well as the fact that stocks remain in the throes of the nastiest correction in more than a year.

Two of the vehicles we sought to trade yesterday came with hidden-pivot supports that could tell us whether stocks are about to run off a cliff. In Beazer, the support lies at 41.08, a downside target that I had previously touted as a lock-up when the stock was trading above 45 a couple of weeks ago. If Beazerbub fails to turn from within pennies of that number this morning, it would be yet one more sign that the housing bubble is in a crash that eventually will rival the dot-com implosion in ferocity.

In Thursday’s Touts we also look at some key Nasdaq-related supports. The tech sector is by now extremely oversold and presumably ripe for a good bounce. However, we shouldn’t lose sight of the fact that some of the most terrifying declines in stock-market history have occurred when stocks were already quite oversold. Indeed, it is in the nature of a bear market to evince rallies that never quite get overbought, just as secular bull runs generate monster rallies from very overbought beginnings.

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San Francisco Seminar

The Hidden Pivot Seminar in San Francisco is a “go,” with only a firm date remaining to be set. As of now, it looks like it will be held in early February, so please let me know via-email  if you’re interested in attending.

The two-day class is geared to teaching traders of all skill levels the rudiments of my proprietary Hidden Pivot System. Post-grad mentoring in a chat-room is included so that students can master the techniques learned in the classroom in a real-time setting. 

A Student’s Experience

Here is what one of my grads, Hunter Reynolds, had to say recently about the chat room:

"We have all come a long way. I think everyone here is making a little $$, or we would be doing something else by now. I can honestly say I am up about ten percent, maybe a little more, since your class.  I am pretty conservative.  I just trade from the long side, but I'm getting really good at picking the hidden-pivot reversal points for the uptrend!"

Dates are not yet firm for a fourth seminar to be held in Sydney, Australia, but it looks like it will take place either in November 2006 or February 2007. The class is filling up, so do let me know soon if you’d like to attend.