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Cautionary Signs

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The yellow flag is out, since the Nasdaq 100, AAPL and the E-Mini S&Ps have all failed so far to reach their respective Hidden Pivot price objectives on this week’s run-up. In addition, VXX, which tracks short-term S&P 500 volatility, looks primed to turn higher following a withering decline begun more than a month ago. If this proves correct, it would imply that the next move in the underlying index will be down. Rick’s Picks subscribers were able to reef the sails by cashing out half of the bullish AAPL butterfly spreads they’d put on a week earlier for twice their acquisition cost. The position was tied to a $152 rally target that lies 25% above, but my gut feeling is that it will be reached before the options expire on November 20. This is notwithstanding the stock’s fall from a 127.32 peak on Monday to 119.65. We may look to load up on call spreads again if AAPL continues to fall, so subscribers should stay tuned to the chat room for real-time guidance. _______ UPDATE (Oct 14, 8:20 p.m.): Bears seem to struggle even when a preponderance of technical indicators swing their way. They were unable to inflict much damage on Wednesday, but even so, it feels like stocks are breaking down. Accordingly, most of my updates have adopted an outright bearish bias for trading purposes. Check them out if you’re eager to play. Some subscribers have staked out a bearish position using VXX calls, but you’ll need to visit the chat room for details.

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