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April 30, 2018 | Week Begins with an Unpersuasive Selloff

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Buyers were spent before the opening bell Monday after rallying index futures moderately overnight. The failure to make headway in the early going gave way to a begrudging 150-point selloff in the Dow that took bears more than two hours to get rolling. That’s why I am not looking for much follow-through on Tuesday. Whatever happens, we hold two tracking positions — one bullish, the other bearish — in DIA that will give us a horse in the race no matter what. Subscribers who reported filling the bearish trade in the chat room have already logged a theoretical gain of at least $284; but the bull play — buying May 18 248 calls near what turned out to be their intraday low — will need a strong rally to turn the position into a risk-free vertical spread as intended.

 

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April 30th, 2018

Posted In: Rick's Picks

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