DIA

The 23,225 downside target we've been using for the Dow Industrials remains valid.  Its DIA equivalent is 232.03, and we can use it to 'mechanically' short DIA if this presumably corrective rally hits x=244.37 (the green line).  My strategy is to sell two May 18 245-248 call spreads for $3 or more, legging into the long 248 calls first. Bid 0.90 for two of them, day order, contingent on DIA trading 242.50 or higher. If DIA falls below 242.50, lower the bid for the calls by 0.05 for each 0.20 decrease in DIA. This means you would be 0.85 bid for the calls with DIA trading around 242.30. These bids are stingy and could turn out to be out-of-range. However, I'd rather have the order go unfilled than pay up even a nickel to get it done. We can adjust on-the-fly if necessary, but I'll have a better idea of 'fair value' for the spread as Monday's session progresses.  (Note: If your account is enabled for such trades, you can simply 'mechanically' short 200 shares of stock at 244.37, stop 248.49.  Please let me know in the chat room if you get onboard this way.) ________ UPDATE (April 30, 10:08 a.m.):  No option trades were reported, since DIA's gap-up opening put the 248 calls well out of reach. However, a subscriber shorted the stock at 244.37 as had also been suggested, so I am establishing a tracking position of 200 short shares, stop 248.49. Make the stop o-c-o with an order to cover half the position (100 shares) at 240.26. ________ UPDATE (April 30, 12:39 p.m. EDT): Since the DIA short was just 200 shares, I'll recommend covering half here, at round 243.19 (or lower). Please report any fills.  Set a stop-loss at 244.37 for the remaining 100 shares.  The

With the Dow closing on a rally target I've been featuring here for a while, I looked for corresponding opportunities to get short using DIA puts. However, the possibilities are too numerous to give us good odds, so I am not recommending a specific trade.  For your guidance, however, if you are itching to  take the initiative, I will mention that D2=253.31 is the target most closely related to the one at 25,278 that I've proffered for the Indoos. It is also the pattern, of the three that are available, that picks up the most confirming 'hits' at the midpoint pivot, 247.21. _______ UPDATE (Jan 7, 5:30 p.m. EST): Buyers pushed DIA to within pitching wedge distance of the 253.31 target. If you've made money on the rally, be prepared to reverse the position or go short 'against the box' when the target is reached. Specifically, I'll recommend buying four 12 Jan 253 puts with DIA trading 253.27 or higher, day order.  They should be trading for around 0.55-0.60, but you can improve your odds of getting them at 'fair value' by closely monitoring the bid/asked spread when DIA gets with about 0.30 of the target.  Stop yourself out of the puts if they trade for 0.25 less than you paid for them. _______ UPDATE (Jan 8, 10:19 p.m.): Let's move out a week and down one strike, bidding 0.86 for four 19 Jan 252 puts, day order, with DIA trading 253.25 or higher. Check back if the options are out of range, since I may recommend raising our bid._______ UPDATE (Jan 9, 9:48 a.m.): Stocks are rallying this morning as usual, allowing subscribers to fill the order @0.81 or better. We'll risk $100 with a 0.56 stop-loss. Exit on a market stop if the puts trade there, good-till-canceled. Make

Today's wilding spree demolished two ostensibly important rally targets we were using for DJIA and DIA at, respectively, 23,665, and 236.59.  The implication is that bulls remain well nigh unstoppable. The rally produced a small trading loss of about $80 on some DIA puts purchased for 0.96 that were stopped out when they hit 0.75. The ease with which buyers exceeded the targets suggests they are well capable of achieving significantly higher levels. Accordingly, I'll suggest using the 245.06 target shown for now, although it won't be in play theoretically until such time as p=238.71 has been decisively exceeded. If the 245.06 Hidden Pivot is reached it would equate to a Dow rally of about 700 points from current levels. There may be an opportunity along the way to initiate long positions 'mechanically' with risk under very tight control, so stay tuned to the chat room and check 'Email Notifications' on your account dashboard if you want to be apprised in real time. ______ UPDATE (Nov 29, 9:45 p.m. EST): Let's try to leverage the 245.06 target by legging into a calendar spread at that strike. Start by bidding 0.35 for eight Dec 22 245 calls, but only with DIA trading 239.34 or higher. If you buy the calls, immediately offer a like number of December 8 245 calls short for 0.14, good-till-canceled.  You can also work this trade as a spread order by using a limit price of 0.21 (debit) for eight Dec 22 245 / Dec 8 245 call spreads, but again, only if DIA is trading 239.34 or higher. This order should be marked good through Thursday. The strategy is designed to produce a maximum profit with DIA rising to 245 over the next three weeks. The spread would be trading for around 0.60 then -- triple

The closest Hidden Pivot above with potential stopping power lies at 236.59. You should trade with a bullish bias until it is reached. If you've held a long position on the way up, use a portion of the profits to cushion a stop-loss on any shorts initiated at the target. A 236.75 stop-loss should suffice. I would not recommend a 'mechanical' buy if DIA pulls back to p2=228.35 (see inset), but you can use this to set up a 'camouflage' trade on the three-minute chart that would limit entry risk to perhaps 0.10-0.12 per share. _______ UPDATE (Oct 25, 8:34 p.m.): DIA has pulled back hard after peaking at 234.70, well shy of the 236.59 target. It remains valid, but we'll move to the sidelines while DIA catches its breath. _______ UPDATE (Oct 31, 8:08 p.m.): I've proffered a bull market target at 23,642 for the Dow Industrials in Wednesday's Morning Line that corroborates and affirms the one given above for DIA. Check out the Morning Line chart if you want to be persuaded this target could matter._______ UPDATE (Nov 1, 9:46 p.m.): A slight correction is necessary for the DJIA target, to 23,665.  This is even closer to the corresponding DIA target noted above. We should watch closely for synchronous tops to form, since this could prove to be a very  tradable event. If you place a bet, near-the-money puts with 7-10 days left on them are recommended._______ UPDATE (Nov 12, 6:08 p.m.): Cancel the trade, since DIA's lovely and usually obliging uptrend has gone all fuzzy on us. The target remains valid, but I wouldn't devote much attention to it as the new week begins.

There's about a 70-point discrepancy between the 231.56 target and the one at 23226 that I've been featuring lately in the DJIA tout (see below).  On balance, I'd use this vehicle to short them both, although in small enough size that you won't feel much pain if the lower of the two Hidden Pivot resistances gets skewered. We never pick tops with the expectation of nailing the exact apex of a 91-month-old bull market, but the fun and excitement of trying is well nigh irresistible. In this case, the delicate sinuousness of the ABCD pattern is what drew my eye to the opportunity._______ UPDATE (Oct 18, 5:08 p.m.): DIA made its intraday high at 231.68, just 12 cents above our rally target. It is a very clear and compelling Hidden Pivot resistance, implying that any easy progress past it, especially ahead of the weekend, should be regarded as very bullish. _______ UPDATE (Oct 19, 8:14 p.m.): Today's dive from within a whisker of my target turned into a swoon when DIA recouped the loss by day's end. Buyers appeared poised to power the Indoos into no-man's-land to end the week, but I'm not ready to give up on the notion that the broad averages are topping here.  Let's see how things play out over the next day or two before we throw in the towel.

I'd suggested shorting 227.88 but will now recommend that you attempt it at the 228.44 target shown. This is two cents higher than the target given here previously, which was slightly miscalculated. You should focus on near-the-money put options that expire in five to twelve days, since we expect them to go in-the-black more or less instantly when DIA reverses as expected from the 228.44 target.  This is not certain, of course, but the bet looks very appealing to me. _______ UPDATE (Oct 10, 8:22 a.m.): The 228.44 target came within a penny of nailing today's so-far high, which came on an opening-bar spike. DIA has since dropped to 227.64, allowing an easy and obvious profit-taking opportunity. What have you done? Your reports will be appreciated, since I'll need to determine what sort of tracking position to establish in order to provide further guidance._______ UPDATE (Oct 10, 6:54 p.m.): Since subscriber reports have been varied, I'll make a one-size-fits-all recommendation: Stop yourself out of any puts you hold if they trade for 25% less than you paid for them. The order is good through Wednesday, since I do NOT want to get stopped out for mere reasons of time decay with DIA trading below the 228.43 target. ______ UPDATE (Oct 11, 4:56 p.m.): DIA finished slightly above the target, implying that any put positions held at the close remain tied to a stop-loss within your comfort zone. If you're planning to stick it out to the last painful uptick, use the 228.78 target shown to calibrate your stop. ________ UPDATE (Oct 12, 9:34  p.m.): DIA topped Thursday at 228.81, three ticks above the "max" rally target given above. If you held onto some puts, tie them to a 228.82 stop-loss and report your position in the chat room so that

The 'jackpot' put bets I'd suggested for Friday failed to trigger, but we'll keep trying. Specifically, we can revert to an original rally target at 224.73 for purposes of getting short.  I'll suggest using near-the-money puts with a life span of no more than 7-10 days, since we are looking to catch a top very precisely both in price and time. This trade should be done with DIA 224.59 or higher.  If the trade sevens out, we have one more promising Hidden Pivot resistance to short -- at 225.71. A run-up to that number would become an odds-on bet if DIA closes above the 224.73 pivot or trades more than about 0.25 above it intraday. _______ UPDATE (Oct 2, 10:43 p.m.): Buyers shredded the 224.73 Hidden Pivot, but I'll suggest trying again at 225.71 with a small put purchase.  Stop yourself out if the options lose 25% of their value. _______  UPDATE (Oct 3, 8:37 a.m.): DIA's pre-opening short-squeeze precisely to my target will make the put buying strategy I'd advised tricky. To simplify, let me recommend placing a stink bid of 0.35, with 0.05 of discretion,  for two Oct 13 225 puts, good only for the first 15 minutes of the session. This is akin to a 'jackpot bet,' since DIA will either reverse from the 225.71 target...or not. My goal is not to make a pile of money, but simply to have some skin in the game at a promising HP target, so that the relentlessly boring bull market will at least seem slightly interesting for a day or two. _______ UPDATE (Oct 3, 10:02 p.m.): We missed buying the puts by a mile because of an error in my instructions, but this turned out to have been a good thing. For now, let's stay away from puts

I don't often use the 960-minute chart, where each bar represents two full days of price action, but I am doing so now because it offers superb clarity with respect to trend strength and price. Notice how DIA barely paused before shredding a 223.18 Hidden Pivot resistance Monday that we might have expected to act like concrete. This strongly implies that DIA is about to head even higher, presumably to at least D2=224.73, or to D3=225.71 if any higher. I expect these Hidden Pivot resistance points to act precisely, meaning easy progress through the lower would be reason for us to confidently infer that the higher is apt to be reached. Either can be used to lay out shorts stopped as tightly as 6 to 8 cents. ________  UPDATE (Sep 24, 5:22 p.m. EDT):  The yellow flag is out, since DIA has begun to roll down from a record high that nonetheless failed to reach the Hidden Pivot target at 224.73 that I'd noted above. (click here to see chart). The weakness could be temporary, but we'll back away for the time being regardless. ______ UPDATE (Sep 25, 11:09 p.m.): Here's a trade that corresponds to one I've flagged in the cash Dow if you want to interpolate it  using options or DIA. You can adjust the midpoint pivot upward if 'C' migrates north overnight but has traded no higher than 223.20 or so. ________ UPDATE (Sep 26, 5:15 p.m.) Today's nutty, gratuitous spasms proved unworthy of our attention. By averting our eyes for a day, we can avoid letting it happen again on Wednesday. ________UPDATE (Sep 28, 12:16 a.m.):  The target at 224.73 given above now looks certain to be reached. Plan on shorting there any way you choose, but be aware that if DIA closes above 225.00, the 225.71

We spent the entire week patiently waiting for DIA to hit 222.62 so that we could buy puts when it was close to an important rally target. Alas, although we got the trend right,  the little sumbitch topped in the final minutes of Friday's session at 222.57, a mere 0.05 points shy of our benchmark. I am canceling the trade because it is impossible for me to know in advance exactly how the stock will open on Monday. Buying puts with DIA very near 222.73, the actual Hidden Pivot target, could prove to be the ticket. But if the stock opens higher and cruises into the wild blue yonder, it will be difficult for me to adjust any put bid I've advised on-the-fly. I'll be in the chat room nonetheless, so be sure to drop in if you're interested in the trade and opportunity knocks.