It’s time to write off the December 40-45 calls spreads that we legged into for free back in September. They could have produced a profit of as much as $4000 if SLW had rallied even moderately since then; alas, even with perfect timing and a great trade, we were able to do no better than break even this time.
I’d already pronounced our calls dead more than a month ago when the stock took a header to $35 as we were coming down the home stretch. It’s tempting to write this stock off as a tease, but we’ll continue to look for riskless buying opportunities as before, since sooner or later, it’s going to have its day. One place we might look to get long is at 35.32, the midpoint support of the pattern shown. While everyone and his mother will be testing the water just above the two obvious lows (see inset), we will have a far more precise spot in mind to look for the turn. As always, we’ll try to hold entry risk down to literal pennies per share if we do the trade. ________ UPDATE (6:59 p.m. EST): Mr Market may be powerless to negate Hidden Pivots, but he has a funny way of screwing with them when a good opportunity presents itself. Yesterday, for instance, moments from the closing bell, he summoned the gumption to bump up against the 35.32 pivot noted above, and to fondle it in full view of all of us who were monitoring the support. While I’m not inclined to play this particular game, initiating a trade as the NYSE clock strikes 1600 hours, some of you may have gone long based on the tout above. If so and the trade survives, please don’t hesitate to ask in the chat room for further guidance if needed.