The short-squeeze from Friday's intraday low missed triggering a 'counterintuitive' buy signal at 265.41 by a hair, but there would have been no compelling reason for us to take the signal ahead of a weekend so fraught with anxiety. If the green line is hit at the start of the week, it would trip a valid signal, nonetheless -- one indicating minimum upside to p=269.42, or even to as high as D=277.42. We can use the pattern to take the stock market's measure ahead of the election, but any trading opportunities that it might afford us will need to be considered intraday. _______ UPDATE (Nov 2, 9:03 p.m.): One Hidden Pivot target down, one to go: 277.42. Used it as a minimum upside objective if the rally continues. _______ UPDATE (Nov 4, 10:35 p.m.): A gap-up opening impaled the 277.42 target given earlier in the week, clearing a path to the 285.75 target shown here. It can be used not only as a minimum upside projection for the near-term, but also as a place to try shorting with a tight stop-loss or an rABC.
By this time next month we may know who won. Just kidding, sort of. Earlier, I predicted that if Trump wins, endless legal disputes would ensue, along with violence in the streets. However, I also said Trump's margin of victory would be big enough to allay Wall Street's anxieties about not having a clear winner. I still see it that way, although given the heavy tilt of the polls toward Biden, I'd want at least 8-to-1 odds to bet on a big Trump win. A smart guy who thinks otherwise is Allan Lichtman, an American University historian with a supposedly perfect record picking presidential winners since Reagan. He has gotten every race right, we are told, including Trump's shocking victory over Hillary Clinton in 2016. It would seem that he also predicted the impeachment. Lichtman favors Biden this time, based on 14 'keys' he uses to determine which way notoriously fickle voters will veer. Incumbency is an important 'key' for Trump, Lichtman concedes, but the President loses out on too many others. He cites as negatives the Covid-depressed economy and the supposed Russian scandal. In my estimation, the professor has gotten these two 'keys' so badly wrong that his credibility should have taken a hit. Instead, he has become a big hit himself, a celebrity on Trump-fearing news shows. Voters Haven't Forgotten Concerning the two crucial negative keys that favor Biden over Trump, except for those afflicted with Trump Derangement System, most voters do not blame Trump for the spread of the virus, nor for its depressing effects on the economy. Moreover, it beggars belief to suggest that Biden could have done better or could do better in the future. Under Obama/Biden, the economy languished in the weakest recovery of the post-War period. But then Trump, with one hand tied
Our lowball bid last week for 16 Nov 20 305/310/315 call butterflies was filled at 0.10, giving us a speculative exposure to an explosive post-election rally. Presumably this would occur if Trump is the winner, since there would be precious little to celebrate on Wall Street if a socialist and her senile running mate emerge victorious. I've altered my expectations for the rally, however, and now think it will be short-lived in any event. That means we might have to settle for less than the potential 50-to-1 payoff if QQQ ascends toward 310 between now and November 20, when the options expire. It's still a pretty good bet in my opinion, one for for which we are getting distant-longshot odds. Please note that those odds would change for the worse if QQQ slips below 260.11 on Monday or Tuesday, since that would negate the bullish rally pattern itself along with the 312.99 target. _______ UPDATE (Nov 4, 11:44 p.m. EST): Today's strong rally allowed subscribers to exit half of their positions for as much as 0.25 -- two-and-a-half-times what we paid for each butterfly spread. QQQ rallied 15 points today alone, so a further rally of 18 points to the 305 sweet spot over the next 20 days is hardly unthinkable. In the meantime, we have reduced our risk on the remaining eight spreads to zero, with the theoretical possibility of making as much as $500 on each spread, or $4,000 for the lot of them. Our initial outlay was just $160. ______ UPDATE (Nov 5, 9:09 p.m.): The spread traded for as much as 0.52 at the top of today's blast -- more than five time what some subscribers paid for it last week. You're on your own now, but be sure to keep a few contracts for a
AAPL shares got hit last week on news that sales in China had been impacted by supply-chain problems. I said at the the time that these difficulties would be forgotten by Monday, since that has been the pattern in AAPL for years: 'Bad news? Who cares.' In this instance, however, I was looking for countervailing strength in the election outlook to hold all stocks, most particularly AAPL, aloft. Instead, investors showed little confidence last week in their ability to pick Tuesday's big winner. We'll have to wait until Wednesdays for the election to have whatever impact it's going to have. The 151.94 rally target will remain valid unless C=103.11 is penetrated to the downside. We made a small profit on some bullish butterfly spreads cashed out earlier. Let's do it again, but using a 128.24 rally target that is more realistic. Bid 0.25 for eight Nov 20 120/125/130 call butterflies, good till noon Tuesday, and only if the stock has not traded lower than 107.85, There's a good chance I will adjust this order, or even attempt to leg on the spread for less than 0.10, so stay tuned to the chat room and your email for further guidance. If you are uncertain about how to execute the spread, review the recorded lesson on this topic on your account page. You should also have 'notifications' checked to receive updates in real time. _______ UPDATE (Nov 2, 9:36 pm. ET): The stock slipped below 107.85 in the early going, nullifying our plan. We'll let it rest on election day. ______ UPDATE (Nov 5, 9:19): The institutional chimps are back, force-feeding tons of Other People's Money up AAPL's old wazoo. Its immediate destination is the 127.52 midpoint pivot shown in this chart, but there are no guarantees it will get there straightaway
We hold some Nov 6 130 puts effectively for free, since subscribers were able to cash out half of the original position for as much as four times what they'd paid. They are a distant longshot at this point, but you never can tell. In any event, they will have a few days to respond to the nuclear shock wave if Joe' Biden wins. I am still predicting Trump's re-election, however, and we should be thrilled to see our puts expire worthless if that's how things play out. There may also be an opportunity to buy IWM 'mechanically' on a pullback to the green line (see inset) if it should be hit on Tuesday before election returns start trickling in. Stay tuned to the chat room for further guidance. ______ UPDATE (Nov 14, 11:53 p.m.): Although I was wrong about the election outcome and the powerful rally it catalyzed in this vehicle, it cost us nothing because we had taken a partial profit on half the position, selling it for twice what we'd paid. Some subscribers actually made money being wrong, since it was possible to sell the puts for as much as four times their acquisition cost. Now, a two-day close above p=161.78 would put a 172.17 rally target in play (60-min, A=143.35 on 9.25). _______ UPDATE (Nov 5, 9:21 p.m.): The way buyers ripped through p=161.78 today all but guarantees that IWM wlil achieve the 172.17 target.
On the chance that many Christmas stockings will be stuffed with Ruger handguns this year, we can position ourselves to benefit from a powerful rise in the stock. The rally target we'll use lies at 99.72 (see inset), and I'm recommending eight Dec 20 95/100/105 call butterflies to leverage a possible move to that number. Bid 0.25 for the time being, but plan on adjusting the price if none come at 0.25. This gambit is effectively a straddle on the election, since urban rioting, looting and violence are likely to erupt if Trump wins, but there is also the prospect of police departments across the country being defunded with Biden in the White House and a consequent unprecedented outbreak of lawlessness. We will look for longer-term 'weaponization' plays if that's the case, since Biden/Harris are hellbent on ending the America Experiment, including a criminal justice system that an army of hard-left lawyers heave been systematically dismantling for years. _______ UPDATE (Nov 2, 8:36 p.m.): The 0.25 bid was midway between a negative bid and positive offer (-040 / 0.95), although in this instance, paying the midway-price proved to have been no bargain. Regardless, the dime's difference between a good price and a lousy one won't likely change the outcome. I'll track the spread at 0.25, as is customary. It will come alive if and when glass starts shattering again in the cities. For now, offer half of the spreads to close for 0.50, good till canceled. _______ UPDATE (Nov 4, 11:58 p.m.): Ruger shares dove on Biden's apparent victory, and so did our call options. A lot could happen between now and Dec 20, when they expire, so we needn't give up on the position. However, and for what it's worth, the most bullish thing I could imagine for our
Silver intraday chart looks a little better than gold's, although a modest rally to the green line at 24.25 would still trip a 'mechanical' short (stop 25.70), as would a corresponding upthrust in gold. The short-term picture would brighten somewhat on a print at 24.77, since that would generate a health impulse leg on the hourly chart. The sooner this happens, if it does, the more bullish it would be. Failing that, the larger, bearish pattern (see inset) still indicates further slippage to p2=21.36, or possibly even D=19.92 if any lower.
The dollar has reversed sharply, averting a nerve-racking test of a long-term trendline that comes in this week at 92.13. DXY got no lower than 92.47 in the most recent down-cycle, and the last time it touched the trendline was three weeks ago at 91.70. The day's rally was not powerful enough to lead bulls out of the woods. but it has somewhat lowered the odds of a major breakdown. Prospects would further improve if the nascent surge generates an impulse leg on the daily chart. That would require an explosive rally exceeding 96.40 at a minimum, but it wouldn't be much of an impulse leg, since the external peak at that price (7/10/20) is small potatoes. On the less important hourly chart, it would take merely 94.11 to re-energize the short-term picture. That;s equal to an 'external' peak recorded on 9/30 on the way down. ______ UPDATE (Nov 1, 10:02 a.m.): Wouldn't ya know it! The little devil topped at 94.10 last week -- close, but no cigar. It looked primed to succeed nonetheless, although the pullback this will have required counts as a mild discouragement of the idea that the rally is destined for big things. ______ UPDATE (Nov 5, 9:27 p.m.): The rally has come suspiciously from two ticks above the in-your-face low at 92.47 recorded on 10/21. If it is not a strong one, look for a relapse to the 91.75 depths of September's abyss. _____ UPDATE (Nov 8, 9:45 p.m.): The rally that got off to such a promising start on 9/1 has fizzled, so I am going to remove this tout to make room for more interesting fare. I will continue to track the dollar nevertheless with occasional posts, although not on the front page.
A stellar session! It covered some basic rules from days of yore so that they are more relevant to the rABC and mechanical setups that we've been using intensively. There are some subtleties here that are capable of taking your results up a couple of notches. We also looked at a very promising butterfly in QQQ that you will have time to execute if you watch this video soon enough. There are also some additional, timely trades to consider in DIA and December Silver. The short-term outlook for bullion is bearish, by the way, and it behooves you to understand why.
Assuming the selloff doesn't take out the 260.11 point C low shown in the chart, the bullish pattern projects to as high as 312.29. This would not be farfetched if Trump wins, so I'll recommend putting on some butterfly spreads centered on the 310 strike. Specifically, you should bid 0.10 for 16 Nov 20 305/310/315 call butterflies, good through Friday. Alternatively, you can try to leg into the position, first by buying 305/310 calls spreads for 0.20, day order. QQQ might have to fall by 3-4 points to get this order filled. If the bid succeeds, offer the 310/315 call spread for 0.20. This is how we would leg into the spread for no cost, but I may adjust the order depending on how QQQ behaves on Thursday and Friday. ______ UPDATE (Oct 29, 9:53): The quoted midpoint on the spread is around 0.16, so we'll give out 0.10 bid one more day. If it doesn't fill, we may have to pay up on Monday.
