Rick’s Picks subscribers, especially newbies, should check for tradable updates to this tout, since JNK’s ultimate collapse is all but ordained — as close to a sure thing as any trading opportunity we will see. Bullish sentiment toward high-yield bonds in general perfectly mirrors the delusions, greed and stupidity that have fed the bull market in stocks and turned the global financial system into a house of cards. I expect JNK eventually to trade for less than $10, so there will be plenty of time to augment and adjust our position as juicy opportunities arise. We currently hold a tracking position consisting of a 100-share short with a cost basis of 35.86 that reflects a timely entry several weeks ago and subsequent profit-taking. We may use option strategies to build the position, but I do NOT recommend buying naked puts, since they are priced to all but guarantee a loss even if JNK collapses. _______ UPDATE (April 12, 10:25 p.m. ET): The rally has stalled precisely at a 34.44 midpoint Hidden Pivot associated with a D target at 35.07. It’s a spec short here, stop 34.51, but I’ll recommend waiting for the juicier opportunity that would take shape if JNK gets closer to 35.07. We may also try to get long ‘against the box’, using p or p2 (34.75) to position a ‘mechanical’ bid. _______ UPDATE (April 19, 8:6 p.m.): Prepare to get short using a very tight stop-loss, since JNK is just about there. ______ UPDATE (April 25, 3:58 p.m. ET): I’m tracking a short position — 400 shares from 35.07 — since I’ve heard from several subscribers who took the trade. For now, tie the entire position to a 35.14 stop-loss while working another order to cover 200 of the shares at 34.86. That last price is two ticks above the D target of the correction from the recent top at 35.15. _______ UPDATE (April 27, 6:55 p.m.): We exited on a 35.14 stop for a small loss. JNK could go as high as 37.25 on this wilding spree, so we’ll almost surely have other opportunities to short the flying pig._______ UPDATE (May 1, 10:11 p.m.): Let’s try again, this time offering 400 shares short at 35.52, stop 35.61. Our trade is based on this pattern on the weekly chart: a=31.27 on 2/12; b=34.71 on 3/18. Our offer lies two cents below the pattern’s Hidden Pivot midpoint, 35.54. _______ UPDATE (May 3, 1:08 a.m.): JNK broke lower out of the chute, so we’ll have to try again later. I expect higher prices because on Wall Street, too much of a bad thing is never enough.
