Our last few attempts to bottom-fish this falling piano have produced only thudding failures (although two earlier bets more than quadrupled in value in mere hours). We used minor targets and kept our wagers small, so there was little pain or damage. The 35.48 target shown is the best bottom-fishing opportunity we’ve seen in months, however, so let’s plan on buying near-the-money call options if and when it is reached. Notice how both p and p2 caught precise bounces. This has confirmed the pattern beautifully, giving us reason to be aggressive with this bet, albeit with the usual tight stop-loss. I’ll suggest bidding for four Oct 13 36 calls if and when VXX is trading in the range 35.45 – 35.55. Stop yourself out if the underlying trades below 35.25 intraday or closes below 35.35. This is a day order, but I will adjust the expiration date and price depending on how quickly D is reached. To keep from jinxing the target, this tout will not be publicly view-able, nor will I mention it in any forum other than Rick’s Picks from this point forward._______ UPDATE (Oct 10, 7:21 p.m. EDT): If VXX falls to within 0.06 points of the 35.48 target today, buy four Oct 20 37 calls. This is a day order. _______ UPDATE (Oct 11, 5:21 p.m.): Continue to work the order. With VXX trading near 35.48 on Thursday, the options look like they’d be a decent buy for around 0.40. Keep in mind that they’ll start to shrivel up fast when the Oct 13 options expire on Friday, so you do NOT want to pay up. If you buy Oct 27 options instead, please let me know in the chat room so that I can adjust my tracking guidance accordingly. ________ UPDATE (Oct 12, 9:02 p.m. EDT): Stick to the game plan detailed above, buying calls only if VXX gets within 0.06 of the 35.48 target. To reduce our chances of going home empty-handed, and to have some skin in the game, I’ll also recommend buying a single Oct 27 38 call at-the-market provided VXX is trading 36.00 or lower, day order.
