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91% Gain on Morning Alert for DIA Calls - Philstockworld

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), USO

This is 4 for 4 this week and we were short Google so possibly a perfect week!

Prices go back to normal next week but still only $2 a day to get full access to PSW Articles as soon as they are written.  


Phil - April 14th, 2011 at 10:11 am | 


Good morning!

It’s a US Dollar smackdown this morning but it’s not helping stocks much.  We’re back to 75.09 again from 75.35 at 7am and the commodities are flying with oil blowing over the $107 line again, back to $107.75 so we’ll watch for another short entry but really violent moves now.  

In the $25KP, we want to take out the April (tomorrow) $30 callers at .09 as that’s up nicely already and they printed the next weeklies and we’ll certainly be selling those later.  

Yesterday, it was all about the 1,313.25 line on the S&P so it still is to the upside but now 1,300 is in jeopardy and 2,750 is already blown on the Nasdaq so that’s danger at the major breakout levels and the order of failure would be S&P, NYSE, RUT, Dow if things turn ugly so plenty of warning if they begin to cascade down which means (and raise your hand if you know where this is going) – it’s time to get BULLISH off the 1,300 line!  

We don’t expect 1,300 to break unless/until the Dollar popped – and it hasn’t so far, so we need to look up now and the DIA $121 calls at .97 are a nice entry with a stop if the Dow can’t get back over 12,200 by 10:30 (and that becomes the stop) or out if we fail .75 or the S&P fails 1,300, of course.  This is not a reversal – this is a bounce cover for longer-term bearish positions!  

In the $25KP, we can hang tight on the short $123 puts, now $1.35 as we’ll have to roll them to the May $118 puts if we don’t get a bounce but I think we will.   

Keep in mind we are just in a zone and we aren’t very bullish under 1,333 and even there we’re very skeptical.  

Oil is calming down already so let’s call $107.50 our cross on the futures to get short again but now the Dollar is 75.05 so we may get $108.50 before they are done.  There are still plenty of barrels to roll but they knocked a lot off the NYMEX and it turns out the rolling situation is better than it looked (bad data) so we’re just looking for one big volume spike down to flush out the rest of the May contracts between now and Tuesday.