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DJX
$108.88
Dow Jones Industrial Average

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DJX -$108.88 Dow Jones Industrial Average

The Dow has struggled to touch 11000 for the last month and has failed to pass even the 10984 we saw back in March. It has found resistance to be strong and the clock is running out on 2005.

The analysts seem split on which will come first, 9,000 or 12,000. We really don't care because this play is strictly a timing play based on the historical January weakness of late.

We are going to use the DJX because options are cheap and there are plenty of strikes.

This is going to be a short-term play, probably less than 60 days. It will be target driven for both entry and exit. There will be no insurance but we will establish stops once in the position.

We are going to add to the position on any Dow gains through Jan-6th. Add one contract, two, ten or a dozen at each trigger point. It is up to you. Since we cannot know what the Dow will do we want to average cost ourselves into a put position at Dow 11000. If it only reaches 10950 we will only have 2/3 of our target position.


Breakout target: $109.00 (Dow 10900)
Buy March $108 Put DJV-OD currently $1.80

Breakout target: $109.50 (Dow 10950)
Buy March $108 Put DJV-OD

Breakout target: $110.00 (Dow 11000)
Buy March $108 Put DJV-OD

If the Dow hits 10900 but does not reach 10950 then add to your position on any breakdown to 10800.
 

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