We were in and out of May 41 puts yesterday, dropping about $50 on four of them as we tested the water. A chart of the puts suggests much lower prices ahead (see inset), which if true means that the underlying vehicle is headed significantly higher. SLV’s daily chart confirms that our 42.60 target “should have” shown some stopping power, and the fact that it did not tends to corroborate the grim prognosis for “don’t” bettors foolish enough to acquire puts. Now, a Hidden Pivot resistance at 43.32 is the first place where we might expect to see some stopping power. You can try shorting there via four May 42 puts, but once again I’ll suggest using a very tight stop-loss 8 to 10 cents below what you pay for the options.
