We’ve been using a minor Hidden Pivot at 217.45 as a rally target, but today’s chart shows what could happen if that resistance is brushed aside. Specifically, we’d need to raise our sights to 230.08, implying a possible 1500-point rally in the Dow Industrials. The 217.45 resistance is still worth shorting for a pullback, and so I’ll continue to suggest that you buy four August 4th 217.50 puts if and when DIA gets within 0.05 points of the target. I estimate they will be trading for around 0.80 if that occurs on Wednesday or Thursday, but you should monitor the option bid/asked as the underlying approaches the target in order to get the best possible price. Mark the order good through Thursday._______ UPDATE (Jul 27, 5:42 p.m. EDT): Based on subscriber reports in the chat room, I’ve established a tracking position consisting of four Aug 4 217.50 puts purchased for 0.82 (some of you did better, some slightly worse). For now, tie the options to a 0.55 stop-loss. That means that if they trade at that price, you should sell your contracts at-the-market at that instant.
