The calendar spread I’d suggested buying yesterday for 0.20 was out of reach at the opening bell, since the Dow began the day on a powerful gap higher, up more than 100 points. The spread was tough to buy even for 0.60 at the close, and although it could widen to $1 or more, I won’t suggest chasing it. Instead, let’s try to get short when our original rally target at 167.05 is reached. You should bid 0.90 for four Nov 7 164 puts, contingent on DIA trading 167.10 or lower. This is a day order, and you should stop yourself out if the puts trade down to 0.70. Cancel the order if DIA exceeds the target by more than 0.10. Note as well that a pullback to the 164.65 midpoint pivot would be a speculative “buy”. _______ UPDATE (8:20 p.m.): The rally died around mid-session, 82 cents shy of our target. Some in the chat room reported getting short anyway, and the trade looked pretty good at day’s end. To those who took a short position home, I’ll suggest taking a partial profit asap and using an impulsive stop based on the 5-minute chart. That implies exiting on a rally that gets past the two labeled peaks without correcting in b-c fashion once above peak #1. _______ UPDATE (October 23, 1050 a.m.): This morning’s vicious short squeeze began within a gap to a 166.03 Hidden Pivot midpoint, where DIA consolidated. This implies DIA is headed to exactly 167.77, where a tradable top seems extremely likely. (And, of course, the rally is tradable as well.)
