I’ve established a tracking position consisting of four contracts to reflect reports from subscribers who got long on Thursday when the December contract came within $2 of a longstanding bearish target at 1044.50. Assuming half the position was cashed out as suggested at 1063.50 for a quick gain, two contracts remain with an adjusted cost basis of 1025.00. This will provide a sufficient cushion to swing for the fences with what remains. I had further suggested rolling into the February futures, which have been trading for around the same price as the Decembers, so it will be the former that I track from this point forward. Although bottom-fishing down near 1044.50 stood to be a high-odds bet, we cannot know how far the rally will get. The important thing was that we were able to stake out a position with initial risk under tight control. My immediate objective is to take another profit, which would leave 25% of the original position. Accordingly, offer a single contract to close at 1101.00. It should be tied to an o-c-o (one-cancels-other) order to stop out the position if the futures fall to 1047.60. _______ UPDATE (December 5, 11:36 a.m. EST): Based on reports from subscribers, I’ll use a 1032.20 basis for the two contracts that remain. It is imputed from an initial buy at 1046.70 and profit-taking on half at 1061.20. The 1047.60 stop-loss is still in effect, tied to an o-c-o offer of a single contract (per four contracts bought initially) at 1101.00.
