Editors Note:

When playing craps and have a winning position, sometimes you press your bet. We currently have a put position on the S&P but I am doubling our downside exposure with a put position on the Dow.


No New Bullish Plays


DIA - Dow ETF - ETF Profile

The SPDR Dow Jones Industrial Average ETF Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the Dow Jones Industrial Average (the "Index"). The Dow Jones Industrial Average (DJIA) is composed of 30 "blue-chip" U.S. stocks. The DJIA is the oldest continuous barometer of the U.S. stock market, and the most widely quoted indicator of U.S. stock market activity. The DJIA is a price-weighted index of 30 component common stocks.

The Dow closed at a new high in an ugly market solely because of big gains in Boeing, Disney and Verizon. If the rest of the market continues lower, the Dow will eventually crater as well. I am recommending we enter a put position on the Dow ETF at the current high.

Buy Oct $215 put, currently $3.30, initial stop loss $221.
Sell short Oct $205 put, currently $1.21, initial stop loss $221.
Net debit $2.09.