The delicate precision of the bullish pattern shown suggests that the longstanding target at 50.42 should have contained the rally very precisely. Under the circumstances, even the small overshoot that has occurred so far must be taken as a sign that bulls have the buying power to push November Crude still higher. Lowering point ‘A’ to 41.94 yields a new target at 51.12, so let’s use that Hidden Pivot as a minimum upside objective for the near term. If it is easily exceeded, the maximum target would be 52.42, calculated from August 3’s low at 40.82._______ UPDATE (Oct 10, 8;48 p.m. ET): Just one small change in my forecast: The maximum target should have been given as 52.24. I’ll recommend bidding 0.14 for ten Oct 28 11.50 USO puts, day order. Don’t pay up! The bid is calculated to steal some of the puts if DaBoyz should lower their bid for them on a show of mild strength in the underlying futures contract._______ UPDATE (October 11, 1:32 p.m. ET): Cancel the bid for the puts, since they traded no lower than 0.28 when oil rallied briefly before mild weakness set it._______ UPDATE (7:26 p.m.): Let’s try something different to take advantage of a clear, 0.10 target for the Nov 4 11.00 puts: Bid 0.12 for ten of them, day order. If USO pops to a corresponding rally target of 11.90 tomorrow, we may get filled. Do NOT pay up for these options._______ UPDATE (Oct 12): The futures went the ‘wrong’ way, heading lower, but I’ll recommend leaving our put bid in until Friday’s close.________ UPDATE (Oct 13, 6:59 p.m.): The puts generated a bullish impulse leg Thursday, hinting that crude’s price is about to turn down. Let’s bid 0.16 for four of them — a stink bid in this case that could work if the futures feint slightly higher in the early going. Make the bid good for the first 15 minutes of the session only. _______ UPDATE (October 15, 5:05 p.m.): I still like the 11.87 rally target in USO, so we’ll try again to catch a top in crude using options in the ETF. Accordingly, I’ll suggest bidding 0.42 for four Nov 2 12 USO puts. The bid is pegged to a ‘secondary’ Hidden Pivot support at 0.39 for the option (and a corresponding ‘D’ target at 0.27. It will always be tricky using the secondary pivot in this way, but if USO rallies to 11.87, that would not be enough to push our puts down to D=0.27. Using p=0.52 to buy the puts looks like a non-starter as well, since, based on option delta values, that would imply a top in USO at around 20.75.
