Google

In recent weeks, I've revived the 'Friday Jackpot Bet,'  a hyperleveraged trade using put and call options on some of the high-flying stocks such as AMZN and GOOG. It turns out that the same tactic works nearly as well on other days of the week, and so we took the plunge on Wednesday, buying GOOG Apr 13 820 puts for prices ranging from 0.35 to 0.90. Because the puts subsequently rose to 0.85 after they'd traded as low as 0.30, some subscribers were able to double out, taking profits on half of their positions. That means they will begin Thursday with put options that have effectively cost them nothing and which could double, quadruple or even octuple in price. In fact, if GOOG were to fall on Thursday by as much as it did on any of three days in the past week, the puts, which closed at 0.60, would rise to 4.00 or more. Whatever the case, I have established a tracking position of four puts @ 0.95, the worst price reported by any subscriber who bought them. You should offer half of them to close for 1.90 (or twice whatever you paid), then manage the rest, which at that point will have cost you nothing, in any way you choose. I'll further suggest holding a small fraction of your original position until just before the close, on the off chance the week ends with a nasty selloff. If this is how things play out, 'nasty' will never have seemed so pleasurable. _______ UPDATE (Apr 16) The puts died in the stretch when GOOG's handlers locked the stock into an extremely tight range for the entire session.  Some subscribers reported coming away with a small profit because the stock feinted lower on the opening bar, but officially I'll score

Monday's push past a major Hidden Pivot midpoint resistance at 778.27 (see inset) hints that GOOGL is developing thrust ahead of Thursday's earnings announcement after the close.  The stock has yet to move decisively above the resistance, but just a little more lift on Tuesday would do it.  Immediate potential is to 826.39, a secondary pivot that lies 6% above Monday's settlement price. If earnings are good enough to surprise and the stock blows through 826.39, it would be implying yet more upside to as high as 874.52, the 'D' target of the pattern shown. There may be a relatively low-risk opportunity to get onboard if price action turns wild, so stay close to the chat room for guidance in real time. _______ UPDATE (April 19, 7:52 p.m. ET): The stock fell hard on Tuesday along with a weak tech sector, but that doesn't necessarily mean earnings due out after Thursday's close will be weak. The bullish pattern shown in the chart remains viable in any case, even if price action so far has not signaled us to get long 'mechanically' at the midpoint pivot. ________ UPDATE (April 22, 1:35 a.m.): A 17% increase in revenues to $20.26 billion supposedly disappointed analysts, sending GOOGL shares plummeting 8.2% in after-hours trading to a so-far low of 717.00. The analysts work for the very same firms whose trade desks at this moment are probably buying the brazen shakedown hand-over-fist from widows and pensioners caught in the long squeeze. Relative to the 717.00 low, the stock became a 'counterintuitive' buy at 739.49 on the initial bounce. The fire-sale opportunity would look even more enticing if a relapse creates a print closer to 704.00. This number corresponds to a low recorded on March 8 that I'm using as a point 'A' for the pattern

Google shares have had the heebie-jeebies since last July, but even the gnarly pattern shown has a certain predictability about it. It suggests the stock will eventually hit 822.20, about $90 above current levels, before settling into some sort of corrective rut -- or perhaps even, heaven help us, a bear market. I am so confident in the pattern that, were Google to achieve the target, I'd want to short there very aggressively. In the meantime, the stock could conceivably become a fetching 'mechanical' buy at any of the three Hidden Pivot levels -- x, p or p2 -- provided the pullback to them meets our criteria for a 'mechanical' trade. I make no attempt to reconcile an implied 12% rally in this stock with the broad averages, since I am skeptical the latter can remain buoyant for much longer. Ideally, GOOG will reach its target in 3-4 weeks with the Dow and S&Ps at marginal new highs. ________ UPDATE (April 3, 10:21 p.m.):  The crime syndicate that controls this stock is so unimaginative that they've opened it lower on more than 80% of the days when GOOG has ultimately gained in price. Helpful trading hint: Buy any weakness that occurs on the opening bar. Friday's manipulation left the stock just shy of the 751.56 Hidden Pivot resistance shown, but if and when it is pushed aside, expect the rally to continue to at least 758.84, and thence to 766. 12 if any higher.  ________ UPDATE (April 6, 10:58 p.m.): A small adjustment in my targets: minimum upside to 749.93 looks likely from here, but any higher would indicate 757.21, or even 764.49.  Use this pattern to get long 'mechanically': 30-minute, A=728.66 on 3/29; B=757.88 on 3/30.

I'd raised the possibility that Friday's manic binge on Wall Street, centered mostly in AMZN and GOOG shares, could mark a blowoff top for the bull market begun in 2009. Although it's too early to tell, bears shouldn't get their hopes too high, since shorts are still hanging on the ropes.  Regardless, the buying spree in GOOG appears to have climaxed for the time being, since its intraday high fell within a hair of the 728.51 target shown. Since it took the stock three-and-a-half months to get there, we should see a substantial pullback now -- "substantial" meaning one that last perhaps two or three weeks.  If GOOG comes a-bounding sooner, surpassing the high within 7-10 days, that would strongly imply that the broad averages are on their way to a test of the old highs. Even if they exceed them, however, it's extremely doubtful that their respective advance/decline lines will surpass the highs made in early May. The bull market has topped internally, as far as I'm concerned, and a move to new record highs should be viewed with skepticism.

A psychotic after-hours leap has slightly exceeded Amazon's this evening in percentage terms -- 13.3% versus 12.6%.  Shares in the global advertising giant jumped $86, to a so-far  high of  748.49, after settling at 651.40 on an otherwise boring day. I haven't checked to see what Google's Q3 earnings were because they are irrelevant. Rallies like this one have less to do with profits than with the fact that a bunch of speculators betting against the company got in over their heads. They needn't have been pessimistic in their assumptions, either; merely selling out-of-the-money calls too cheaply was all it took to trigger off a short-covering panic. To take an example, if you'd shorted an October 23 700 call earlier in the day for 1.60 ($160.00), it would cost you about $2500 at the moment to get it back -- or as much as $5000 with the underlying stock trading near the so-far high of this remarkable short-squeeze. Taking in $160 apiece for calls that were $42 out-of-the-money and due to expire in 24 hours must have looked like free money to short sellers. In reality, it was like insuring homes on the Outer Banks for cheap as a hurricane makes its way up the Florida coast.

We usually save our Jackpot Bets for Friday, but the 593.60 target shown looks so tempting to short that we'll try something different this time: Buy four September 12 580 puts if the stock gets within 20 cents of the target.  This is a day order, since the time-decay factor will grow trickier as the week wears on. Although that wouldn't preclude making a high-leverage bet later, it would necessitate more work, since we would need to 'synch' the option and stock price on an hourly basis.  I estimate that the puts will be trading for around 0.70 or so with the stock trading near the target, but that price could fall to 0.50 or even lower if it happens late in the day. In no case should you pay more than 0.70 for the puts, nor should you buy more than four of them. ______ UPDATE (12:08 p.m.): Google stumbled out of the gate this morning and fell $8 without rallying, so our jackpot play was a non-starter.

We saw a possible shorting opportunity during yesterday morning's tutorial session, but GOOGL quickly disabused us of this bold idea with an upward burst that altogether ignored the sluggish behavior of the broad averages. Will GOOGL now drag every Tom-Dick-and-Harry stock higher for at least another day or two?  Quite possibly, since the market itself, while eking out but a modest gain, showed perverse buoyancy in shrugging off a downward revision of Q1 GDP data that could only be described as catastrophic.  If this forecast proves correct, look for the stock to hit the 592.04 target shown, a Hidden Pivot resistance of minor degree. Accordingly, traders should position from the long side for now, but with the goal of getting short with a generous stop-loss (i.e., 20 cents) when the target is reached. I would suggest doing so via the purchase of July 3 puts at the first strike price where the puts are offered for 1.00 or less. _______ UPDATE (9:18 p.m. EDT): Yesterday's feeble head-fake to 589.60 on the opening diminished the value of the target 592.04 target, but I would encourage you to use the same chart to attempt bottom-fishing at the midpoint pivot or 'd' target of any follow-through leg to the downside Thursday night or Friday morning.

Our first 'Friday Jackpot Bet' was a qualified success, since subscribers were able to buy expiring calls at the 565 strike for 0.30 or less, then to sell half of them a short while later for 0.60. This made it possible to hold the remaining calls effectively for 'free' for five hours as we awaited the small rally that would have pushed them into-the-money. A mere $4 thrust would have caused our calls to quintuple in value. Alas, the rally never came (at least not until the last seconds of the day -- see inset) -- an unusually quiet day for Google shares, particularly on an expiration Friday. But our results underscored the possibility of doing no worse than breaking even on a day when things haven't gone our way. Make no mistake, this play is a longshot bet, and whenever we attempt it we should be reconciled to the prospect of losing it all.  Over time, however, if we hit just one out of every seven or eight attempts, the results should speak for themselves.  If you want to join us in real time next Friday, click here for a  free trial subscription -- no credit card necessary. This will give you access, for two weeks, to all member services, including timely trading touts and a 24/7 chat room that draws experienced traders from around the world.

We had fun on Friday looking in real time for hyper-leveraged opportunities in Google, monitoring put and call options that were expiring in mere hours rather than the usual days, weeks or months. We were initially focused on bull trades via bottom-fishing an intraday low. However, as GOOG continued to smash one Hidden Pivot support after another, it finally dawned on me that perhaps the stock wanted to go lower. Then, two hours before the close, with GOOG trading around 1190, I posted the following, based on a just-noticed Hidden Pivot pattern on the lesser charts:  "I'm looking at a possible washout to 1185.86, so momentarily-expiring, ultracheap puts are [therefore] just as viable as calls right now." The puts I had in mind were the March 22 1187.50s, quoted at 0.50-0.80 at the time.  Although they had traded for as little as 0.10 earlier in the day, when the stock traced out some freakish gyrations on the opening bar, they were hovering beyond easy reach as we watched them ratchet higher.  By day's end they had traded as high as $6.00, implying that a perfectly timed $100 gamble could have returned as much as $6000 for two hours of work. We were explicitly looking for such opportunities, the theory being that relatively small price swings in a stock can produce enormous price changes in options when they are about to expire in an hour or two.  The outcome we saw exceeded anything we might have imagined, mainly because GOOG fell by $16 that day.  But it is evidence nonetheless that we can trade weekly options just one day a week -- on Fridays -- and hope to reap bigger gains than we would earlier in the week, when options are still fat with premium.