DIA

There are three alternative rally targets in addition to the one I've selected at 217.21, but price action at the p midpoint pivot persuaded me I've got it right. There is not much of a spread between the lowest and highest possibilities, so the choice of targets won't make too much difference in our game plan. Still, if our plan is to get short by buying puts at 217.21, we may as well try to do so without experiencing pain or stress.  For now, however, use p2=213.82 to get long 'mechanically', provided you know how it's done. If not, query me or any other Pivoteer in the chat room for guidance in real time. Making a few bucks enroute to the rally target will allow us to widen the stop-loss if and when we attempt to get short.  Eight put options at the 217 strike, with 2-3 weeks left on them, is what I've got in mind.________UPDATE (Jun 21, 5:07 p.m.): DIA  pulled back to p2 too quickly to set up a proper 'mechanical' buy. We'll put it aside for now and simply look to get short if the 217.21 target is closely approached.  The weakness of the past two days would become technically significant if DIA were to fall below 212.75. That would generate a bearish impulse leg on the hourly chart for the first time since mid-May.

DIA is on a 'counterintuitive' buy signal tripped in the opening minutes of Tuesday's session. With an upbeat close, the ETF looked like an odds-on bet to reach the 206.83 midpoint Hidden Pivot Wednesday morning. My gut feeling is that the rally's potential is limited, and that's why we're focused on shorting into moderate strength. Accordingly, I'll recommend bidding 0.68 for four April 21 205 puts, day order. This price should be do-able if DIA rallies hits the red line. I've pegged the bid to a trendline that has caught two lows over the last week. I've also allowed for the fact that this is a four-day week, shortened by the Good Friday holiday. This means premiums for options expiring the following Friday will begin their death dive Wednesday afternoon, and that's why you shouldn't pay up. I'm not suggesting a stop-loss for the puts because I'd rather take them home over the weekend than blow them out for bupkus if DIA ends the day at D=208.71. That'd be another tempting place to get short, so there's no point in abandoning the position. _______ UPDATE (Apr 12, 8:18 p.m. ET): Two days of feeble price action has further distanced DIA from the 206.83 rally target where we'd hoped to buy some puts. We won't chase them, but you can still plan to bid them in case DIA surprises on Thursday by rallying to the target. You'll probably need to raise the bid a smidgen from 0.68, since the options look like they will trade no lower than around 0.75-0.80 unless DIA moves significantly higher.

The Trump rally, much like the Trump presidency, is looking a little green around the gills as the latter approaches the 100-day mark.  Although the stock market has seemed virtually bomb-proof, rarely selling off hard for more than a day, rallies since the broad averages topped on March 1 have grown noticeably weaker. The biggest "up" days in the last month have begun with gap openings that produced bull-trap highs. Under the circumstances, permabears itching to get short can be pardoned for wanting to take a shot. Let's tee up a speculative play with a 1.10 bid for four Apr 21 207 puts, good through Tuesday.  That's about where the puts should be trading if DIA rallies to the  207.78 midpoint pivot shown in the chart.  This price is intended as a rough guideline, and so I'll suggest trying to improve on it by simply observing the bid and offer for the puts fall as the pivot is approached. Your bid should be midway between bid and offer when DIA gets within a few ticks of 207.78.  Stop yourself out of the position if the options trade for 0.25 less than you paid for them; then, plan on trying again at D=209.66. I'll provide guidance in the chat room according to how things develop.______ UPDATE (Apr 10, 10:52 a.m. ET): With stocks in a weak rally this morning, volatility is getting crushed. My guesstimate on the puts we're bidding is about 94 cents, well below the 1.10 noted above. In any event, you should follow my guideline for buying the options if and when the underlying very closely approaches the target. _______ UPDATE (Apr 10, 6:22 p.m. ET):  The puts stayed out of reach because DIA rallied no higher than 207.32 before relapsing moderately. We'll stay the course (see above)

Our put tracking position has performed very well. That's because, based on my initial guidance and updates, subscribers were able to buy the options precisely when the broad averages were topping last week.  Based on reports in the chat room, quite a few subscribers took this trade, and some have reported realizing gains so far exceeding $3000. Officially, however, I am tracking three March 31 208 puts that remain from an original purchase of sixteen. Based on Friday's 2.60 closing price for the puts, the tracking position's gain is $1090. For now, continue to offer a single contract to close for 3.70.  If you purchased a multiple of the original 16-contract order, you can increase the size of your offer commensurately.  DIA's intraday charts suggest it could fall as low as 203.37 this week if the pattern shown (see inset) plays out as we might expect. Although DIA rallied into the close on Friday, this occurred after it had decisively breached the midpoint Hidden Pivot support at 205.34. That's mildly bearish. Keep in mind as you hold a few puts to swing for the fences that they would be worth nearly 5.00 apiece if the target is reached before Wednesday.  That amounts to nine times the 0.56 we paid for them less than a week ago. ______ UPDATE (Mar 26, 8:12 p.m. EDT): Index futures have broken sharply lower Sunday evening, putting us in good shape to take more profits. Anything could happen on the opening, but on the premise that the puts will spike to their intraday high moments after the opening bell, I'll recommend offering two thirds of the three-contract position (or multiple thereof, depending on how many you still hold) for 5.90.  This order should be placed BEFORE the opening. If it is not filled, cancel it

Before the broad averages started to plummet this morning, subscribers who followed my earlier guidance had acquired eight March 31 208 puts for an average price of 0.92. I advised taking a profit on half of the position when their price doubled to 1.82 early in today's session. This leaves us with a tracking position consisting of four puts that effectively cost us nothing.  Based on the recent closing price of 2.18, our theoretical gain is $872. For now offer a single put (or 25% of your position) to close at 3.10, and another at 3.70. This guidance could change, but if it does I will post the modification in the chat room and send an email bulletin in timely fashion. To receive this and other such updates, make sure you've checked 'Email Notifications' on your account dashboard.  _______ UPDATE (Mar 23, 7:47 p.m.): We'll stay the course. Although today's gratuitous up-and-down price action generated a bullish impulse leg on the hourly chart, I expect any rally on Friday to fail at 206.72, if not from a lower level. Here's the chart.  _______  UPDATE (Mar 24, 3:28 p.m.): DIA's rally today failed 18 cents from where I had forecast. Subscribers who hold this position and have followed my guidance should have sold a single contract (or 25% of your remaining position) at 3.10, with another offered at 3.70. The DIA puts are currently trading for 3.20, meaning the position is showing a theoretical profit of $1270 for each eight options originally purchased. This trade was intended to be simple enough for even novices, since it began with a straight limit bid to buy the puts. I'd be pleased to hear from those in particular who have made some bucks this time but who had never booked a profit before on

We've been itching to buy some DIA puts, since it's quite possible the S&Ps topped in a major way two weeks ago. The broad averages have fallen moderately since, and although I would prefer to buy the puts when this vehicle is rallying, there can be no guarantees that Mr. Market will be so accommodating.  Rather than try to predict the future, I'll suggest buying some March 31 208 puts if they continue to fall to the targeted levels shown in the chart.  More precisely, I'll recommend bidding 1.08 for four puts and 0.76 for four more, good till canceled. Note that our bids sit just above, respectively, the secondary pivot and the D target of the price pattern shown, since we don't want to risk getting shut out if the options bottom briefly at either number. This guidance pushes out our original put-buying strategy by a week, since we'd originally focused on the March 24 expiration. The trade is geared for subscribers of all levels of experience, including novices whose brokerage accounts are set up for options. I have posted the trade to The Scoreboard as well, revising my prior guidance. _______ UPDATE (Mar 15, 7:55 p.m. EDT): The puts dipped to 1.00, so I am tracking four at our bid price of 1.08. The trade has also been recorded on The Scoreboard. We still have a bid in for four more at 0.76. For now, offer two of the puts we bought for 2.16 -- twice what we paid -- good-till-canceled. _______ UPDATE (Mar 16, 8:58 p.m.): Continue to bid 0.76 for four more puts, but cancel the closing offer for two contracts at 2.16 to simplify things. _______ UPDATE (Mar 17, 2:53 p.m.) Subscribers reported buying four more puts for 0.76, as recommended.  We hold eight of

With the Trump Rally looking winded, we discussed buying some DIA put options for a speculation in the chat room on Friday. Ideally, we should do so when DIA is rallying and the puts are weak. Accordingly, I'll suggest bidding 1.15 for four DIA  March 24 210 puts on Monday, day order.  That's four cents above the 1.11 target shown, but we'll have a good chance of getting filled if stocks begin the week with a lurch higher. Typically, DaBoyz would take advantage of this by dropping their put bids down to levels well beneath fair value in order to mug retail customers who have entered orders to sell the puts at-the-market on the opening. DaBoyz could conceivably shut us out by bidding a penny or two higher on the opening rotation, but even if they do -- just to be nasty -- we have nothing to lose from trying. Our edge over DaBoyz lies in our knowledge of where, exactly, the puts should bottom if the broad averages open on Monday on moderate strength. ______ UPDATE (March 13, 7:58 p.m. EDT): Extend the put bid for another day, through Tuesday. If it goes unfilled we'll consider going out an additional week.

There's a promising rally target at 210.26 whose significance I won't go into here, but you can check out the DJIA tout below to get the gist of it. This opportunity calls for a put-buying strategy, especially because I would like newbies to participate. I seldom recommend using options for directional plays, but because this one has rather significant potential, I'm going to make an exception.  Accordingly, bid 0.92 for four March 10 210 puts, good till-canceled. I have not used delta values or a Black-Scholes model to come up with that option price. Rather, I've simply projected a target low using ABC price action in the option itself (see inset). This order is extremely unlikely to fill on Friday, and I expect to adjust it next week to get the price perfectly right. What I do NOT want is to see reports in the chat room from breathless subscribers who have jumped the gun and bought 50 of these puts. Unless you REALLY know what you are doing, wait for an explicit buy signal from me before initiating this trade. Do not discuss this trade in the chat room, since I want to keep it as 'dark' as possible. There should not be any questions either, since the information I've provided above is complete.  If you don't think so, then I would strongly suggest that you watch from the sidelines. There will always be another opportunity. Finally, if you are not signed up for real-time notifications, go to your account dashboard and check the appropriate box. That way you will always be alerted in real time when I have timely information to share with you. _______ UPDATE (Mar 1, 11:16 p.m. EST): Having demolished a clear rally target at 210.26, DIA appears to be locked on a new one

The Dow's thrust today was not as strongly impulsive as the S&Ps', but this could work to our advantage if it helps set up a 'camouflage' entry opportunity. Notice in the inset that if the rally were to exceed the #1 peak and then pull back, it would leave a couple of slightly higher peaks unbreached. This would likely be read as a double-top by the riff-raff and most technicians (although not by Elliott Wavesters, who know an impulsive move when they see one), creating potentially ideal conditions for a 'camo' entry using a buy-stop. I've sketched this hypothetically for your further guidance -- with the hypothetical but not unlikely dip below the initial point 'C' low, just to screw with traders' brains. _______ UPDATE (Jan 25, 11:19 p.m. EST): DIA opened sharply higher on a gap, negating our buying strategy. The stall almost precisely at the 200.67 midpoint pivot (see inset, a new chart) implies this vehicle will be bound for 204.65 once decisively above the pivot. _______ UPDATE (Jan 30, 8:53 p.m.): I'm confident that this morning's steep selloff will turn out to have been a fake-out if the futures can close today above 200.39. Use a 202.35 rally target if that happens. _______ UPDATE (Jan 31, 8:49 p.m.): I've changed the chart to reflect a new, somewhat lower target than the one at 204.65 flagged above. DIA would trip a theoretical buy signal if it hits 198.54, but if it closes above p=199.53, you can bet the rally will continue to at least D=201.49.