I started tracking DIA again thinking it would provide a way to trade the swings without having to use futures contracts. Alas, this ETF for the Dow plays catch-up nearly every day, gapping up or down on the opening depending on what index futures have done overnight. However, the 242.09 target looks ripe for bottom-fishing, notwithstanding the existence of ‘structural’ support from some lows made near 242 a month ago. Accordingly, I’ll recommend buying four expiring 254 calls if DIA gets within 5 cents of 242.09. That will probably be the lowest strike available for under $1. The order is good for the first hour only. The trade seems likely to survive whatever plunge DaBoyz are able to engineer Sunday night, since the Dow would have to fall more than 800 points to negate it. ______ UPDATE (Jun 29, 9:56 p.m. EDT): The trade detailed above came nowhere near triggering. Instead, an inside day left no interesting possibilities for the moment. _______ UPDATE (Jul 1, 12;12 a.m. EDT): A ‘mechanical’ short at the green line looks moderately enticing, although I’ve advised against a similar trade in the E-Mini S&Ps due to the sums involved. In this case, you can take a small speculative stake using Jul 10 puts at the first strike where they are priced under 1.00 (241 should be close). Index futures have already gapped above the green line in night trading, and it’s impossible to predict where this vehicle will be at the opening bell. I may be able to sharpen (or perhaps cancel) the trade then, so you should hold off unless you really know what you’re doing. _______ UPDATE (Jul 1, 9:48 p.m.): With a three-day weekend approaching, I’ll suggest shifting to the July 17 puts.
DIA – Dow Industrials ETF (Last:258.00)