MCP Trade Update

I have MCP March $5 calls and a MCP long equity position for a longer term trade as I tend to get out of the options as fast as possible on momentum.

MCP has been a tough pullback, but it has maintained a beautiful looking chart. Just from what has happened and how it reacted, I think Goldman is a buyer of MCP which would be a large position (some of the home builders that were accumulated in 2000, nearly 3 years before they made 2500-3000% runs, were accumulated for a year to a year and a half-I'm not saying that's MCP, just that institutional money takes on big positions and GS was responsible for knocking MCP down in to an accumulation zone).

Here are the charts, the long term charts have stayed in great condition, it has been the short term charts and intermediate that needed to connect to the long term and they are starting to do that. I'm not sure what it would take for me to add to a call position, but if I saw the right set up, I'd probably do it.

 The big gap down was courtesy of GS, but since then the 60 min chart has had a huge leading positive divegrence, this is part of why I think GS is behind accumulating this one.

The 30 min chart locally is leading positive too so these have stayed in really good shape, it has been the shorter charts that needed to jump in line.

Here's a 1 min, note on all of the intraday charts to follow, this flat price range has seen strong leading positive divergences.

 The concept of migration of the divergence (strengthening and showing up on longer charts) is alive and well here as the 2 min is leading positive as well.

The 3 min is also leading positive, all in the same area with emphasis on the most recent flat range.

And you can see it's breaking through to the 5 min chart which is starting to lead in the same area.

The 15 min chart already has a large relative positive and slightly leading positive divegrence so I don't think it will be much longer before MCP pops to the upside and this is a longer trending trade in my view, not a quick long/market correlated trade.

I think for me to open additional options, I'd need a break below the most recent flat range and very strong accumulation of that, this would bring premiums down and show the move to be a run on the stops, barring that, I'll probably just stick with the option/call position in place, it's March and has plenty of time. As far as the equity long, it's already full size, but I'd consider adding to it on further strengthening of the 5 min chart which is highly probable with the way the 1-3 minute charts are moving.

If I had no exposure to MCP long and liked it, I'd consider a phased in entry here, maybe half right now and add another half if there's a run on stops as the most recent flat area of the last day or so is starting to build an obvious support zone where stops would congregate just under, but my risk management would leave room and reflect that plan before I entered the first half of the position.