We shouldn’t kid ourselves that it will be easy to buy puts when the Indoos have fallen 231 points a day earlier. Regardless, because the weekly chart looks primed to roll over, we should at least try to get a piece of the next downdraft. Accordingly, I’ll recommend bidding 1.55 for four April 4 160 puts. I’ll adjust this intraday, since it’s most unlikely they will fall into our lap at that price. From where I’m sitting at the moment (i.e., Thursday night), it is not predictable how DaBoyz will stage-manage whatever distribution they might intend. It’s possible there will not be enough buying power to do so. On a Friday, the most difficult scenario I could imagine for would-be put-buyers would be as follows: 1) a mildly weak opening, perhaps with a small rally, followed by 2) a steady drift lower during the middle hours, and finally 3) an accelerating, ugly selloff into the close. Predictably, DaDirtballs would then rally index futures ever so gingerly Sunday night, distributing what they can; but the decline would resume in earnest before the opening bell on Monday, denying traders an opportunity to get short. ______ UPDATE: Like Malaysia Flight 370, the update I posted to this tout Friday morning mysteriously vanished without a trace. The gist of it was that the puts we were seeking to buy for 1.55 never traded any lower than 1.82. This, despite the fact that the Dow was up nearly 50 points in the early going. If the puts had been fairly priced at the time they’d have traded for around 1.48. Obviously, DaBoyz are not eager to sell puts right now for anything close to fair value. Even so, we can never afford to give away any edge to DaDirtballs. Better to hold no option position at all than to have paid a dime too much for it. _______ UPDATE (Sunday night): The downtrend is too far advanced for us to dabble with puts. We’ll await a better opportunity.
