I sometimes put Hidden Pivots aside and trade from the gut. Right now, my gut is telling me that the bull market in this stock is a Wall Street hoax that cries out to be shorted.  I’d suggested doing so a while back, but I’m ready to get serious now and will be looking for a good entry spot. For the time being, however, and to tide over traders who may be chomping on the bit, I’ll recommend putting on put butterfly spreads well below the market. Specifically, I’m recommending that you buy the January 18-20-22 put spread 100 times for a slight (i.e., 2-3 cents, to pay for commissions) credit. For each spread done, this would entail shorting two January 20 puts, buying one January 18 put and one January 22 put for a net credit of a 2-3 cents. This is tough to do at the moment, and if the influx of orders resulting from this recommendation rattles the market makers too much, we can try to end-run them by legging into the spread at possibly even better prices.  The inset shows the relevant bids and offer for the options we seek.  If we’re successful, maximum profit on the position would be $20,000, with no loss possible (even after commissions).

So why am I down on Yahoo? I mentioned here earlier that I do not share the Street’s reverence for the company’s CEO, Marissa Mayer. She may have been a hotshot at Google, but that kind of talent — any talent short of genius, in my opinion — is not fungible in the dot-com business.  If she were the Steve Jobs of web-based marketing/advertising, I’d say Yahoo! has a chance to rule its world. Instead, far from innovating, Mayer went out and paid $1 billion for Tumblr, a dot-com purveyor to the teen set that most of you will likely never have heard of. A Wall Street Journal think piece opined that $750M of the purchase price was just good will.

These are just some of the reasons why I think Yahoo! is headed into the dumper — and that it will get there a lot faster than that limping lump of brick dust, Microsoft. Most recently, what has spiked my negativity toward Yahoo! is that they are evidently using malware to insinuate their toolbars, search bars and such on my browser practically every time I install an application. This could explain how the stories Yahoo! has planted with their sycophants in the news media have been able to claim that the company has been growing its market share and advertising base. Perhaps. But because they seem to be cheating to do so — to stay in the game with Google and Facebook, mainly — I’d rather be short the stock than chasing it like so many crazed investors have been doing lately.