Yogi Berra must have had CenturyLink Inc. (CTL) in mind when he made his now famous quote. This is exactly the same recommendation I made on August 16, which triggered on September 4 and exited on September 7 to avoid the dividend liability. That trade although not stellar was a gain of 2.52 percent in just a few days. I believe we are presented with another opportunity to collect 2 to 5 percent quickly. Since this is the exact same trade I am presenting the article as it appeared on August 16 when I first published it. The chart and the block data matrix have been updated to include the blocks which were the impetus for revisiting this trade.
CenturyLink (CTL) is poised to move lower. There are certain indicators which lead me to believe a decline is imminent. In fact, it may have already begun. Therefore, my caveat to investors: never chase a stock, including this one. If we miss the move, that is fine. There will always be another opportunity.
If you have read the Manifesto, then you know that I like to use Japanese candlesticks in my charts. I would like to highlight a few candlestick formations which I found interesting in this issue.
- On August 1 there is a Shooting Star (although the candlestick body is a bit longer than usual);
- On August 9 there is a more pronounced Shooting Star/Doji;
- On August 14 there is a Bearish Engulfing Candlestick (albeit slight);
- The Candlestick of August 14 also resembles a hanging man with a short wick;
As you should already know Doji (pronounced the same singular and plural) are bias neutral. That is to say, they are neither bearish nor bullish. However when occurring at the top of a sustained advance (as is the case in this issue) most chartists consider it a bearish signal.
With regard to the Moving Averages: Notice that every time the spread of the 10, 20 and 50 day Moving Averages widens the price declines. Additionally it typically takes place to the accompaniment of heavy aggregate volume or large blocks. The spread is currently very wide and large blocks have traded. In my mind this has all of the elements of a setup.
Even though these patterns and indicators are sufficient cause for some traders to establish positions, I believe that by themselves they are not. You need to witness large block trades. Having seen the large blocks and a confluence of indicators gives me cause to believe that the decline is underway.
I believe that the block of August 1 was a combination of a distribution and a short. There are many additional blocks in the 1 and 2 million share range that are not included in the block data matrix.
It appears to me, that CenturyLink has been extensively distributed and shorted at these levels. The Designated Market Maker will need to replenish his inventory. Since he has unilateral control over price, where he decides to reset his wholesale price level is at his sole discretion.
Although I expect this reset of the wholesale price range to occur at a much lower level, where exactly the DMM decides to reverse the trend will most probably be determined by where investor tolerance levels are exceeded and they “tap out” (capitulation). If and when this happens it will be in connection with a block in excess of 7 million shares. 
On the basis of the foregoing, these are my views and observations:
The Trade:
I recommend establishing a short position in CenturyLink. Open you position with only ¼ of whatever capital you intend to commit to CenturyLink at $42.78 or better. Purchase the remaining ¾ of the position at $46.20 and stop out at $48.01. Do not post your stop loss. I have said it before but it is so important that at the risk of being redundant and in an abundance of caution I will say it again. It is too easy for the Designated Market Maker to cash investors out by moving the price above or below your stop out and move the price right back up or down again. In addition, when a stop out is triggered it converts into a market order and that could be disastrous if the DMM decides to really take advantage. Remember the “Flash Crash“? I would be looking to exit this position with a downside price target of $40.38.
There is always the possibility that the trade may not work out.
There Is Never A Sure Thing (particularly on a short).
Investors must realize and recognize that there is never a sure thing. Sometimes events that have a low probability of occurring bring forth very serious consequences should they come into being. Investors must judiciously consider what the inherent practical limits are and how much they stand to gain in relation to the risks involved in establishing any position.
In addition, persistence can become desperate folly by allowing a losing position to become a viable argument for deciding on a new position. Rather, such decisions should be based on the current and soon-to-be circumstances.
Any position in which one unexpected factor has a significant impact on your portfolio is the result of poor planning. It is a fault most commonly associated with people who want to explain away their losses. SUN TZU – Art of War “Use an attack to exploit a victory, never use an attack to rescue a defeat.”
If you follow the process recommended and the trade does not work, the overall loss in this model is $3,000.00. That amounts to .003 of the overall portfolio (theoretically valued at $1,000,000).
Finally, never be a brave and brainless investor because a fool and his money are soon parted.
A portfolio of $1,000,000 should position size in the following manner: 
This is a trade, not an investment. Be ever vigilant.
That’s it for now…. Have a nice day.
Disclosure: This is a trade, not an investment. Be ever vigilant. See Performance Tracking here.