GS

We hold the January-October 130 put spread four times for 3.40 but were unable to buy a round lot of stock yesterday on our terms as a hedge. Let's try another approach today, bidding 3.10 for a single October 175 call, day order.

If Goldman falls without having bettered Friday's 164.90 high, you can bottom-fish a midpoint support at _____ with a stop-loss as tight as 15 cents. If the stop is hit, odds of a more serious correction to as low as 156.61 would shorten.

I had to check Edwards & Magee to see whether yesterday's weakness may have compromised the bullishness I inferred from the island gap reversal in this stock. My guess is that the renowned authors of Technical Analysis of Stock Trends would have seen it as a mutant specimen of the genre to begin with, since the two gaps do not overlap. In any event, if we simply look at it as a routine abc pattern, filling in the gaps with hypothetical, unbroken bars, as we are wont to do, a _____ downside target comes into focus, subject to a bounce from the _____ midpoint. In fact, the bounce has occurred from 158.00, so we might infer that a dive to _____ awaits if the midpoint is breached decisively.

The maniacs who dominate in this stock left a relatively rare and unquestionably bullish island-gap reversal on the hourly chart yesterday, threatening bears with a frontal assault if they should grow too bold. Since Goldman is still our favorite bellwether, we should take the threat seriously to the extent that the stock is capable of dragging the entire market higher if it catches fire.  I had suggested a mechanically inspired short in the SKF Ultrshort Financials -- a bullish play on the banks -- and this latest development in Goldman seems to explain why SKF's rally could be short-lived.  Instead, let's speculative modestly in Goldman itself, bidding 2.60 on the opening for one ____ call. If the order goes unfilled, lower the bid to 2.40 and keep it there as long as the stock doesn't fall below 160.00.

Goldman's Friends in (Very) High Places seem to have cut the stock loose these last two weeks. We'll know soon enough whether they're just being coy, since there are two quite-clear Hidden Pivot supports not far below. They lie, respectively, at 156.34 and 153.57. Either number can be bottom-fished at your whim with the very tightest of stops, but you'll be on your own if you fill.

It's not for no good reason that Goldman's spectacular bull run has stalled where it did, at 170.94. Notice in the accompanying chart the high at 172.45 made nearly a year ago, in early September.  That is not what we call a "look-to-the-left" peak, since it lacks the whimsical subtlety of such resistance points. Rather, it is a very crucial resistance peak because Goldman fell apart right after it was recorded. Sellers up to this point have been trying to get their money back, or perhaps make a few bucks, but anyone still holding for a thrust above 172.45 is on probably on board for the long haul.  Odds of a "false" breakout seem low, but if the stock were indeed to collapse from a high above 172.45, it would rank as one of the wickedest bull traps in memory.

A decline today touching 157.01 would imply that the stock's problems are serious.  To leverage the downside speculatively with relatively little risk, I recommend buying the  ______ put spread for 3.40 up to a dozen times.  If anyone fills the order, which is good through Wednesday, please let me know in the chat room so that I can establish a tracking position for your further guidance.

Goldman is in crucial territory, having narrowly failed on its last thrust to reach a ______ target we've been using for quite a while. The stock also failed to surpass a ______ peak made eleven months ago,  thereby squandering an opportunity to refresh the bullish trend on the daily and weekly charts.  These signs will become more worrisome still if the stock extends its losing streak today by falling beneath yet another low on the hourly chart at _____.

The already maniacal pitch of Goldman's rally has turned parabolic, suggesting that the rally could soon reach a blowoff top.  We impede its progress gingerly if at all, but even so, the pattern shown in the accompanying chart is clear enough to warrant a short nonetheless at its _____ Hidden Pivot target. I'll leave this trade to your designs, but officially we'll look to buy two September 160 puts if and when the stock gets within 10-15 cents of the target.