So far so good.
As I said in yesterday’s post(and the weekend wrap-up), we were well-positioned for the drop – It’s just a quesiton of finding a bottom now. It didn’t take very long as we found it at 9:46 when I sent out an Alert to Members saying:”Once again it’s a good time to sell the DIA $95 puts at $2 as the volume on this sell-off is not at all exciting so far. As long as the Dow holds 9,450 (now 9,475) it’s a good play.” We had a couple of spikes below but, on the whole, 9,450 held like a champ and those puts hit our 20% target by the day’s end (some of our quicker traders even had a chance to double dip). That level and 1,010 on the S&P will be our critical teststoday as well.
As you can see from David Fry’s SPY chart, that 1,010 line on the S&P represents the bottom of the range we broke out of on Aug 21st after failing it several tiimes earlier in the monthso it either holds this week or last week begins to look like noting more than a blow-off top at the tip of a downturn.
We followed through with our DIS play but we’re still hoping to do better on the call sale to complete our buy/write. We took an early stab at shorting OIH but chickened out by the end of the day and we took advantage of a nice drops in ITMN, LZB (hedged)and CIM (hedged)while adding protective plays by going long in TZA (hedged)so it was a busier day than we planned. We also picked up some more fills for our $100K Portfolio, as per our weekend plans and that portfolio jumped $500 on the day, which is nice for a down day and indicates we are doing pretty well on that balance thing…
At 1:03 I sent out an Alert to Members saying: “Should be stick time after a blow out bottom- I still like those DIA $95 puts sold naked for $2+, looking for .25 to .50.” We got a false run at 2:30 then a drop down to a blow-out spike at 3:30 and then, of course, the daily stick, that took up right back to good old 9,500. The movement is getting so aggregious that even conspiracy theory-hating Barry Ritholtz is now saying: “I’m not inclined toward conspiracy theories, but it’s difficult to…
