There’s just no rhyme or reason to the market these days…
China, Puerto Rico, Greece, Russia, Iran, oil, gold… you name it. And it’s making a mess of the market.
The Dow fell 200 yesterday. We’re down another 90 today… after challenging historic resistance that’s given way to downside many times in the past. Unfortunately, foolish bulls just don’t pay attention all the time at nosebleed levels.
While I’d like to say we’ve bottomed out, we haven’t. We could easily test June lows of 17,500 before we even begin to see signs of an end. Even then, we’re still overvalued.
The worst is far from over.
One of the best ways to protect yourself from downside potential is buy buying to open the DIA November 2015 177 put up to $6. Consider taking a small position these days.
At the same time, consider selling to close the second half of the Micron (MU) October 20 put for solid gains. We exited the first half on July 9 for up to 59% gains. Be sure to hold the MU October 20 call on potential buy out news.
Until next time… stay safe.
The market is even more chaotic as usual. Fears of a recession are laughable in a modern day depression.
Ian L. Cooper
Forgotten Profits