SPY

The two patterns shown in the chart yield precisely the same target, 136.25, so we'll plan on shorting there if and when it is reached. Specifically, I'll recommend buying four March 136 puts, which would be well priced at around 2.05-2.15. Since this looks like a high-odds spot for a reversal, and because it could be precipitous and opportune, we'll be on high alert for any downturn occurring from somewhere beneath the actual target. Anything above 134.00 would be in potential camouflage territory.  I am grateful to an alert Pivoteer, Steve Frewin, for spotting these coincident patterns. I might have overlooked them had it not been for his query. _______ UPDATE (February 23):  We'll put the target aside for now, since SPY has generated a bearish impulse leg of daily-chart degree.

Stayed tuned for intraday guidance. I detailed plans here earlier to leverage an expected rally to 136.25 by buying the Feb 133/136/139 butterfly spread. (You can access the full strategy by selecting "DIA" in the "All Picks by Issue" pulldown.)  We'll back away for the moment, however, since recent weakness hinted of an imminent fall. If so, that would allow us to put on the butterfly more easily at attractive prices.  We could also try legging into the position if DIA rallies, shorting the Feb 133/136 vertical bull call spread to start. _____ UPDATE (January 25):  We'll put this trade on ice for the moment, since it's just too darned hard to buy bull spreads at bargain prices if stocks only move in one direction day after day, week after week, month after month.

SPY appears hellbound for at least 136.25, a Hidden Pivot that comes from the weekly chart, where A=87.00 on July 10.  Let's try a very low-risk directional play, butterflying the Feb 133/136/139 strikes.  To put the position on, and to virtually eliminate theoretical risk, we'll need to short two Feb 136 calls for as much as we pay for the offsets -- a single Feb 133 call and a Feb 136 call.  That would effectively be "doing" the butterfly for "even' (i.e., no credit or debit), and it would yield a maximum theoretical profit of $300 per butterfly with the stock trading at 136 on expiration day (February 18). We'll want to be careful about putting on this position, since little errors in a three-sided position can whittle away our edge. We may wind up legging into the position by buying a Feb 133-Feb 136 vertical bull spread when SPY dips to a Hidden Pivot low, and then shorting a Feb 136-Feb 139 call spread on a subsequent rally.  Those two action together add up to: long 1 Feb 133 call; short 2 Feb 136 calls; long one Feb 139 call.  However we do it, I will signal the appropriate strategy intraday in the chat room and by way of an update to this tout.  This may seem like a lot of hard work, but I am going to work hard myself in an attempt to make back for you the cost of a one-year subscription.