DIA

There's a Hidden Pivot at ____ we can short that is equivalent to the rally target given in today's forecast for the cash Dow. Its provenance is shown in the chart (inset), and I'd be surprised if we didn't get a tradable pullback.  Officially, we'll buy two September 90 puts (DAVUL), stop ____, but you can change the order in any way that suits your style.  I estimate that the puts will be trading for around ____, and you can use that number with a limit order  to simplify things.  If you do, however, you'll need to make sure that your bid is not executed with the underlying stock trading above _____.

The futures traded up to 89.23 on the opening bar yesterday, stopping out a Pick of the Day short at 89.21 for a tiny loss.  (If you were slow to react, or if you used a slightly wider stop, you could conceivably have come away with a profit, since the futures never traded above 89.27 and spent nearly the entire day below that number. The intraday low was 88.10.)  The fact that the upside target was exceeded, albeit only slightly, suggests still higher prices are coming. If so, look for a pop today to _____, a Hidden Pivot that you can try shorting with a stop-loss at _____.  You'll be on your own if the order fills, but don't hesitate to nail down a partial profit on a pullback of as little as 15 cents.

I'm not keen on chasing the puts, so let's move to the sidelines and wait for the minor downtrend play out.  If the Diamonds are going to provide us with another opportunity to get short on an upswing, they should put in a tradable bounce from either ____ or _____, or both. While we're waiting, you can bottom-fish the second number with a stop-loss as tight as 8 cents.   _______ UPDATE: Cancel the bid, since DIA has remained stubbornly buoyant

We'll stick our necks out an inch today, bidding 1.90 for two ____ puts.  We'd be looking to buy more of them if the futures were about to top at a Hidden Pivot resistance, but in this case they have already started lower, negating any edge we might hope to gain by shorting as Hidden Pivot swing point.

The September 84-May 84 call spread that we are long could have been exited yesterday for as much as 4.60, yielding a theoretical gain of $310, since our adjusted cost basis on the four spreads was 3.82. (That includes a loss of about $150 on a September 76 that we also held.) If you still hold a partial position, exit at will today -- presumably at a profit, since May time premium will be melting away to zero with each tick of the clock.

The September 84-May 84 spread that we hold four times is an easy exit right now for around 4.20, which would yield a theoretical gain of $160. That would hardly be worth the effort, so I'll suggest waiting until you can come away with at least 4.40, for a profit of about $240

We hold four September 84-May 84 call spreads with a cost basis of 3.82. We will be cutting it closer than I had imagined in trying to come away with a decent profit, but it should be easily possible if the Diamonds get drawn lower this week, passing once again through the "equator" at 84. The position leaves us somewhat frontspread, since the May calls that we are short will pick up deltas more rapidly than the Septembers we are long if

We hold four Sep 84 (DAVIF) -May 84 calendar spreads for 3.45 and a September 76 put for 1.49. The May calls that we are short are showing suprising strength, so that we are showing only a slight gain on the spreads and a more than offsetting loss on the put. There is nearly $600 of theoretical profit potential between now and next Friday

Our bullish position includes four Sep 84 (DAVIF) -May 84 calendar spreads for 3.45 and a September 76 put for 1.49. The spread is currently trading for around 4.00, yielding a theoretical gain of $220, but we can probably do better, so let it ride. If the Diamonds hit 84 this Friday, we'll try to exit for around 4.50. The timing would favor us, since it's going to dawn on traders by then that May options expire on the earliest possible date, the 15th. Come Monday, May option premium will start to melt away fast.