GS

Stay tuned if you’re as keen to short this brick as I am.  We are taking a patient approach — and a good thing, too, since the merciless squeeze that Goldman’s deft handlers have applied to the scrota of bears is starting to produce some real pain.  Indeed, yesterday’s opening-bar spike refreshed the bullish impulsiveness of the 120-minute chart. It also furthered the prospect of our getting long while we wait for the stock to make a targeted top suitable for shorting aggressively.  Want to join us for the ride?  Click here for a free trial subscription to Rick’s Picks.

Hey, I’ve got a hot tip:  Run the other way when some tipster wants to share a piece of juicy insider information with you.  What would you have done if he’d told you earlier in the week that the notoriously well-connected banking firm was about to report horrendous earnings for the fourth quarter? You’d have jumped on some put options, right? Maybe a dozen or two March 95s, which were selling for around 3.50 with the stock loitering suspiciously near $98 on Tuesday.  Guess what: The tipster got it exactly right. Goldman’s earnings could hardly have been much worse — down 58 percent for Q4.  As for the March 95 puts, does an instant double to $7.00 sound about right? In fact, they traded for as little as 92 cents yesterday, having shed three-quarters of their value in just a few short hours as the stock soared almost $10 from the previous day’s low.

This breathtakingly counterintuitive outcome is one of the sleaziest bear traps I’ve seen sprung, and although it’s ultimately going to undercut the stock’s credibility as it makes its way down to, oh, $10 a share years from now, for the time being, Tuesday’s short-squeeze will provide exactly the kind of buoyancy that its handlers — a bunch of goniffs that  I wouldn’t trust alone with my cat — had sought in order to unload shares on widows and pensioners.  Sometime before this swindle runs its course over the next couple of weeks, we’ll want to lay in an inventory of way-out-of-the-money puts so that we can later attempt to spread off their risk when the stock eventually plummets like a brick on ginned-up “good” news. Want to join us for the ride?  Click here for a free trial subscription to Rick’s Picks.

Hey, don’t get me wrong, I was actually looking forward to doing that grass-skirted hula dance in lower Manhattan – the one that emergency surgery postponed last winter.  But at the rate this cinder block has been falling, it may yet deny me the opportunity, since my hula pledge would be negated by a drop below $30.  That doesn’t seem to be in the cards at the moment, since Goldman shares bounced yesterday from within inches of the Hidden Pivot midpoint support shown in the chart .  The bad news — bad for Goldman and its shareholders, that is — is that the fairly precise midpoint bounce has corroborated its ‘D’ target of minus 9.69 (!).   Now, we know that can’t happen, of course, but let me remind you that negative targets came up for Lehmann, Bear Stearns and Fannie Mae in the infamous forecast that I sent out several years ago, just ahead of the bank stocks’ capitulation.