Trade Idea: MCP January $5 Calls

I'm going to go ahead with a partial position in MCP January (monthly) $5 calls, this will be a half position, until/unless MCP breaks below $4.67 which is not out of the question, given the NYSE TICK data, I'd put the probability at 65%. If that happens, then I'd add the other half.

Typically I'd go at least 6 weeks out on the expiration, but because I feel this is a very short duration move, I'm going with January.

Take a look at TLT which I mentioned in the context of the longer term last night and TBT long in the context of the near term TLT movement.

I think TBT long is a workable (2x leveraged Short 20+ year or 2x leveraged short TLT) position as well.

I'll feature that in a moment.

As for MCP, TICK data does look like a pullback broadly across the market is pretty likely intraday, but I believe to set up a larger positive divegrence intraday which had been negative as of Friday's close and carried through to this morning, this is now shifting toward our slightly longer weekly view of probabilities as prepared for late last week.

MCP...

 The intraday 3 min chart looks better and better which is migration of a shorter divergence moving in to longer timeframes.

The range is often a dead give-away as well.

This 1 min intraday chart is in line, but it would not be unusual to see a double head fake move and MCP make a move below $4.67, which is where the initial trade looked appealing, in this case I'd likely use that as an add to and fill out the options position.