We remain long Nov 22 calls whose cost basis has been reduced to about 18 cents by rolling the short side of our spread forward each week. The price assumes you were able to roll into short Oct 18 calls on Friday for at least 12 cents more than you paid to get back the Oct 10s. I elected to come in naked-long the Novs on Monday myself because of the way things closed on Friday (i.e., there was a short-squeeze on TLT that pointed to 122.02, and a companionable long-squeeze on index futures). My naked strategy is riskier than I’d advised subscribers, but you should at least be aware that taking extra risks will always be an option if you have good reason to do so. Now, if this little monster ever corrects, I’ll hold an ‘impromptu’ session to help subscribers set up a brand new play with an ambitious target. We may also opt for legging into vertical bull spreads if the correction looks precisely targetable. _____ UPDATE: The peak of Tuesday’s rally came within 0.04 of the long-term target shown (a new chart, with a slightly revised target), giving us strong reason to expect a significant correction from these levels. It should be assumed that Hidden Pivots always ‘work’ — implying that if TLT now blows past this one, buyers are not even breathing hard after the steep run-up of the last month. Our calendar spread, meanwhile, should produce a premium gain of perhaps 12 cents each week that we continue to roll it forward between now and November 15. Many subscribers appear to have rolled the spread upward, which would have the effect of increasing profits from the rally. If you let me know in the chat room where you stand, I can provide more-precise guidance. _______ UPDATE (October 16, 1:00 a.m.): Just to stretch the bullish imagination, I’ve refreshed the chart to show what’s possible when TLT shakes off the damage from yesterday’s wild upsy-daisy and does what it appears fated to do, technically speaking. The 145.25 target is now my minimum upside objective, and although it would not surprise me to see the stock meander near the redline (midpoint pivot) for a while, or even pull back to the green line, I plan to be an aggressive buyer on any weakness. _______ UPDATE (October 30, 6:59 a.m.): The hourly chart reversed yesterday from 118.42 rather than from an expected 118.20. This is ostensibly bullish, but I still see a further correction to 116.76 as necessary to fully offset the spike-high nuttiness on 10/15. Technical aside, my gut feeling is that it may be futile to wait for a “full” correction in a vehicle that is headed into the high 140s, at least.
