DIA blew past a clear Hidden Pivot resistance at 217.45 on Friday with such panache that we must assume new record-highs are coming. If so, you can use the 220.19 target shown as a minimum upside projection. A pullback to the red line can be bought ‘mechanically,’ stop 214.54; or, with somewhat less risk, to the green line, stop 211.69. We hold four put options purchased for 0.82 that should be tied to a 0.55 stop-loss. That means you should sell them at-the-market if they trade for 0.55. Our theoretical loss on the position would be $108. _______ UPDATE (Jul 31): An hour before trading ended last week the puts fell to our stop; then, they subsequently traded as low as 0.48 before the closing bell. You should have exited the position. We’ll try again when appropriate, always with little patience or tolerance for trades that don’t go our way when we are trying to pick a top. The fact that DIA paid no heed to so clear a Hidden Pivot resistance suggests Mr Market aims to inflict yet more punishment on bears. This time, he beat us for a big $108._______ UPDATE (Aug 2, 10:45 a.m.): DIA topped this morning at 220.13, exactly 0.06 points from the rally target I’d provided, before falling to a so-far low at 219.54. If you got short at the top please let me know in the chat room so that I can determine whether to establish a tracking position. _______UPDATE (Aug 3, 12:03 a.m.): Only one subscriber reported having gotten short using my rally target, so I have not established a tracking position. Regardless, the 69-cent pullback that followed the high should have been used to take a partial profit. Assuming you did, you should tie what remains to a 220.21 stop-loss.
