IWM – Russell 2000 ETF (Last:160.68)

I was only mildly bearish on this vehicle when the week began, but Wednesday’s intraday high generated a divergent stochastic peak that could spell trouble just ahead. Accordingly, I’ll recommend buying ten Nov 6 130 puts for 0.15-0.20.  This is a highly speculative bet, and you should be prepared to lose it all. But it seems underpriced to me, since IWM has shown itself capable of falling 20 points in a single day. The position will settle after the election, and that makes the puts look like an even better buy. _______ UPDATE (Oct 22, 12:43 p.m.): Subscribers reported buying the puts, so I will track ten of them for 0.16, the highest price paid. I’ve suggested buying a few more for 0.09, day order, but keep in mind that this is money you should feel comfortable kissing goodbye.