The intraday dip in the market hit a couple stops but I still believe it is a buying opportunity.
The intraday dip knocked us out of the two index positions. Both of those came at exactly the high of the day for the puts. Sometimes things just don't work out.
The SPY position was stopped at $121.25, 13-cents from the low for the day. The option was trading at $2.94 and our entry was $2.56 for a 38-cents loss.
The ISM position was stopped at $72.50, 17-cents from the low for the day. The option was trading at $2.43 for a loss of 42-cents.
Those were tame losses compared to Walter Energy. After spiking to nearly $100 at the open the stock imploded to lose -4.43 and close more than $6 off its highs. The rapid decline to our stop at $94.50 elevated the put premiums to $3.25 when the stop was hit. That is a $1.35 loss in the position and one of the biggest we have ever suffered. With 20 days left in November I am confident we can recover that loss and end the month with a profit.
The market is reacting to profit taking and the fluctuation in currencies ahead of the G20 this weekend. We just need to get past this rough spot and catch the next wave higher.
There will be no update on Wednesday. My wife is having surgery and I will not be available to write.
Current Position Changes