The Indoos have been lollygagging for more than two months, biding their time until DaBoyz are fairly certain of how the election will turn out. That could come as early as next week if the stench of corruption swirling around Biden becomes too powerful for the mainstream media to ignore. That could take some doing at the New York Times, whose editorial offices are already an ethical cesspool, and at the Washington Post, which is owned by a man, Jeff Bezos, who obviously despises Trump. Ditto for Mike Bloomberg’s vast news organization. In the meantime, DIA, an ETF proxy for the Dow Industrials, has been in a holding pattern. My gut feeling is that it will hit the 297.18 target regardless of who wins the presidential election, but if it’s Biden, the Indoos will fall even more sharply than they did in March. The easiest way to leverage this scenario is to buy way-out-of-the-money puts that expire three to four weeks after the election. Accordingly, I’ll recommend bidding a very stingy 0.44 for ten Nov 27 240/250/260 put butterflies. (It’s worth around 0.58.) If you are uncertain about how to do this, please review the recorded lesson on butterfly spreads located on your account page. This order is good through Wednesday, but I may adjust it, possibly with the goal of legging into the spread for significantly less. _____ UPDATE (Oct 28, 11:10): The cautious bid I advised was a crucial step behind the big move down, so you can shelve the order for now. _______ UPDATE (Oct 29, 10:33 p.m.): DIA dipped impulsively beneath a key low at 265.27 recorded on 9/24. This would have stopped out more than a few bulls and therefore lightened the burden of profit-taking on the bounce. It wasn’t much of a bounce, however, and that’s a bearish sign for the moment. This is the only vehicle I would consider shorting — in small size — ahead of the weekend, especially if DIA ends the day with a small gain.
DIA – Dow Industrials ETF (Last:266.59)