In after-hours trading, TLT has fallen to within two ticks of the 118.13 target where we’d been looking to buy call options during the regular session. We still are, but we’ll need to wait and see how recovery hubris plays out following the 8:30 a.m. release of jobs data by the Department of Labor. The over/under bet is 235,000/200,000, but the way TLT hs been acting, and based on the bullish look of the S&P 500’s charts, it seems likely that job growth for October will exceed expectations. That said, even a small disappointment would send bond prices soaring, since they got hit hard yesterday on speculation that a blowout jobs number was coming. Alternatively, and even if TLT rallies on Friday, we should expect a relapse to 116.69, a compelling Hidden Pivot target that I mentioned in the chat room. It’s based on these coordinates from the hourly chart: a=125.57 (10/15); b= 120.48 (10/17); and c=121.85 (10/20). It is at this target where we should plan on doing our most aggressive buying, initiating the long side of a vertical call spread that we may be able to turn riskless by legging into some short calls on a rally.
