Google

The lnatics were out in force after the close on Thursday, trying frantically to read meaning into the $4.07 billion earnings Google just announced for the second quarter. This beat analysts expectations by a hair, and the company called it a "very good quarter."  However, traders were reluctant as always to act as though any such pronouncement could be taken at face value, and as a result, the stock was gyrating wildly early Thursday evening. It is trading at an indicated 427.41 at the moment, but we'll go out on a limb with a prediction of _____ before buyers are spent for the near term. 

We hold a September 270 - September 510 strangle for 13.20 that we legged into and then gave up for dead, not for no good reason.  A payoff is still a longshot, but the way the stock has been moving lately, it couldn't hurt to remind ourselves that we do have a horse in the race. From a Hidden Pivot perspective, Gluggle could run up to as high as _____ and how would your strangle look then, Fast Eddie?

A move above Friday's 420.46 high would be bullish for the near term, since that number fell within 0.15 of a Hidden Pivot rally target visible on the intraday charts.

We hold a single September 270 put acquired a while back for $8 that is about as useful and pleasurable as a hangnail. Before it goes to its reward, let's look for a way to offset the likely loss, since this stock, a throwback to the Dadaists,  has a chance to move up to 507.24 within the next 4-5 weeks. Our strategy will be to leg into a calendar spread at the 510 strike, starting with the long call first.  September 510 calls (GOPIU) are currently trading for around 7.00, and the September 510-July 510 call spread for about 5.00, but we'll try to put it least somewhat better by buying the calls when the stock corrects to a Hidden Pivot low. Our goal for purchasing the spread is $3 or so, and if we can get in at the price, our odds of recouping the loss on the put and then some will be pretty good.  For now, bid 5.20 for one September 510 call, good for the remainder of the week. ______ UPDATE: Google swooned $7 this morning, but the calls we were trying to buy traded no lower than 5.90. We're on the right track, but we won't pay up. Continue to bid 5.20 for the calls, which are too prized by market makers to  come easily. For your own purposes, keep in mind that our efforts are premised on a powerful rally. _______ FURTHER UPDATE (June 3, 10 A.M.):  The order filled this morning when the Sep 510 calls traded down to 5.10. At the time, the stock was bottoming near 430, down nearly $6 (although it eventually went $4 lower, recovering partially by day's end).  For now, do nothing further. Keep in mind that our rally target for the stock is above $500, and that our goal is to spread off the call on the way up.

No, you're not imagining it: Google has conspicuously lagged the financial stocks in the current mania and is even starting to look a bit heavy on the daily chart. We hold a very modest short position in the form of a single _____ put, so we should be cheered

We continue to hold a modest short position, a September 270 put purchased a while back for 8.00. The position is no longer tied to any technical rationale, but rather to my gut feeling that the rally in this stock since we acquired the put has been seriously misguided (much like the rally in Microsoft, a stock in which we also hold a small short position). Yesterday's $12 decline was therefore a breath of fresh air, but

Google is stealing up on a midpoint resistance at ____ whose breach could signal more upside over the near term to as high as _____. That Hidden Pivot can be shorted with a stop-loss as tight as 22 cents, but don't attempt it if the stock initially gets within 20 cents of the target and then drops back more than 30 cents. Officially, we'll buy a September

Implied volatilities have collapsed so badly that the September 270 put we hold for $8 can be bought for a bit less than that even though the stock is trading nearly $10 lower. My hunch is that option volatility will return once Google has had the opportunity to fall a further 50-70 points. We can wait, since our risk

_______ UPDATE (11:10 a.m.) Google's $24 run-up over the last two days is evidence that the company cannot keep an earnings secret, but don't hold your breath waiting for the canny insiders who took advantage of it to be prosecuted. In any event, the surge so far has accomplished only what we'd expected all along, driving the stock to a peak this morning that lay within 40 cents of the 387.70 target we identified a couple of weeks ago. The September 270 puts traded down to 8.31, so we'll carry one officially for 8.40.