There's no comment box on the new thread. My short recommendation of the evening is Disqus.

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YOU LAZY BUTTS!!!

Just shorted several Sept. ES at 1023 with 1026.00 (sept. es futures) stop based on my wave count.
I consider it a low risk entry with the possibility of it extending into a long term trade.
http://www.youtube.com/watch?v=9lngGPsJ1pQ

Thanks for including the "Sept" in that post, I completely forgot I have to roll mine. Always a pain to figure out the best time. I know when you're "supposed" to roll them, but I always prefer to find a time to get out and wait for the counter trend and then get into the new ones. Thanks.

One thing, that's a pretty damn tight stop for the middle of the night when the futes bounce around. Good luck. I hope we see triple digits tomorrow.

Any time, now pass the melatonin.




________________________________

Any time, now pass the melatonin.




________________________________

Lets see if there are legs to this market. Tomorrow will be gut wrenching either way and I don't have a chart for that. (As a post script, in 2007 we were going up in the same time frame on low volume, except earnings were realistic).

Mole, saw your picture, you are so cute! Sorry about West Hollywood women but what did you expect, so many people there are insecure and shallow. Your look is very hip and would go over well in San Diego, here it's much more relaxed and cool. I read your blog often and love it, but alas, I'm still learning and too ignorant to add any meaningful comments. I learn so much here, thank you all.

I actually started a company in San Diego - I let you know next time I'm down there - about once a month going forward.

Max Pain is pretty interesting. They have an OK track record. Check some tickers. Bodes well for bears.
http://www.optionpain.com/MaxPain/Max-Pain.php

I have no reason to blog hop, chasing around looking to see what others are doing... talent here good for me...
Looks like Moles needs some Luv, so got out my really big crystal balls
If, the top is in or close on the SPX, then this is a good possibilty (giant H&S in future)... I join the PSGuitar and others in this boat..
http://screencast.com/t/cNFjimEiHR

Hey, guess what everybody! Believe it or not, I did a post about the Transports!
http://tinyurl.com/mz5u3p

Massive bear wedge in BTH: http://partiallystapled.com/~gxti/charts/2009/09/08-BTH.png

Only 110k average volume, but it's easy to borrow and just a hair off the lower trendline. I've got an alert set at 38.35.

Looks like 1040 in the next 2 days and then a reversal to maybe 1005 to me. Been rangebound in attached SPX chart

http://screencast.com/t/gQpFjNFr

I agree...

I turned a tiny bit bearish today after the bottom call I made last week around 990, and I entered into some small short positions. Financials look weak short-term. I expect a pullback and possible re-test of 990-1000 before the market moves to higher highs (which I expect it to in Sept).

Will add to the short positions on any morning strength.

Mole,
This market is so funny. It sells off but they buy it right back...and worse yet, it then holds and waits for another excuse to rally higher. I know we don't like it, but that is what its doing. Its flipping hilarious.....like a helium filled balloon....it just won't stay down.

I would really like to see the $RUT back at 400, but it keeps coming back to 575.

If it even gets close to 400 in November, I'll cash out a TF and sponsor a party at the evil lair....what do ya say? from about here that would be about $17K......good party huh?

And maybe you could bring your girl...you know the one whose picture was on the site last night?

Okay, I'm starting to take this personal - 82 measly comments since the close? Is there a particular reason everyone has moved over to the Slope?

Nothing personal at all, Mole. I just don't have anything constructive to add about markets right now, though hopefully you caught the note I left a couple weeks back about the melatonin and gave it a shot. Maybe in a couple of years when I've got a trading account and not just a 401k. Until then, I'm just a laid-off baby rat, not even 10 years out of school, but at least I'm debt free :)

Anti-depressive or hemoroid med. - I'll take either?

Neither... it's a non-addictive sleep aid.

Thanks anyway but I'll only take it if it's addictive.




________________________________

Mole,

At least you're getting comments. Traffic is way down in the tickerforum trading threads as well. It sucks donkey balls being a bear right now.

The reason is that the market is not making any real big moves....So people are trying to find a venue to eat up there time. I guess SOH is a place to chat with people until we see a big move...Then its back to business.Not saying SOH is just a place to kick tires...I think at this time, everyone is kicking tires at all sites, until we see a big move.

yup
TK is "pinkier" and "biggier" and it does not matter that his ...account is "smallier"

We need a party.
Everyone is mad that you went to party with the slopeheads and we didn't get an invite.

not to overlook that market moving higher is Mole's fault as well - he skipped ringing nasdaq death bell!

Hey guys... just dropping a nice interview from Mr Prechter himself ... it's probably a few days old and it goes for a little more than 1 hour long... as its usual a very nice exposition of ideas...

http://www.financialsense.com/fsn/main.html

just a chart http://screencast.com/t/WIl3zHOugD4

$BKX looks like it's ready to roll over. Retraced a bit over 50% and was rejected... Today it was weak. So this is promising for us bears.

http://content.screencast.com/users/Cerebro82/folders/Default/media/17a1794c-ec26-4013-bf83-a416b9015bb4/BKX.png

For raised_by_wolves re: my post from yesterday (http://tinyurl.com/ly6z8h)...

There was little change on the C.O. - the lines just got a little closer together. I was probably irrationally exuberant in thinking that something would need to occur today. This always happens when I try to guess what the C.O. is going to do - I'm extremely impatient and I hate that it always forces me to be patient. ;)

In any case, we are still at an inflection point and I see no compelling reason to have any short-term position in the market until the picture is clearer, but that's just my style. I do think that will happen in the next couple of days.

In fact, I had a phone conversation with the market and this is what I said: "You chop around, I launch the gas. You form a triangle, I launch the gas. You've got forty hours, till noon, day after tomorrow, to make new highs or new lows. I am aware of your GS trading bot countermeasures. You know and I know it doesn't stand a chance. This is the Chicken... from Alcatraz. Out!"

I see H/S patterns on XLF and SPX. Lets hope this time its for real

If it is, it appears to have an ascending neckline so even if it does follow through it is not likely to take us down very far. We did also manage to clear the "left shoulder" with today's gap on strong volume so it may be fair to say that the pattern is not really valid http://bit.ly/31k9ak

The trick is to figure out whether its "H&S Classic" which is a bearish reversal pattern, or "The New H&S", which was introduced in 2009 and is a bullish continuation pattern.

lol i here ya

Dan has some thoughts on aapl

http://3.bp.blogspot.com/_TwUS3GyHKsQ/SqbkKjkg1gI/AAAAAAAABtc/ObgcRSlYzrs/s1600-h/appl.png

Uncle Buck stopping by tomorrow and luckily for the bears he brought a spine this time.

http://www.screencast.com/users/lostillini/folders/Jing/media/52062a9c-a168-411d-a8de-1a8f244ef946

with you due to a lot of other than how's that hammer hanging" reasons
sorry for messy chart
UUP http://screencast.com/t/cbAmjbYlk

David,
I do have question.. How do you read this much information packed in here..?

I do this :)
http://screencast.com/t/95BAEA4fT

Hi David,
Thanks for the prompt reply.. I know that most of you have TOS or TD accounts, but I don't have any... So when I look at most of the chart links, I try to see the info there... I am learning and have opened TOS paper account, in which I try to reproduce some of what you all experts post.. But many millions thanks to you alll..

Perhaps that lunchtime burrito clouded my judgement but here is some bear food... Broken Trendline retest and drop. Hey when you own a small mountain of Sep lottery puts you look for bad news under every rock ;o)

http://www.screencast.com/users/lostillini/folders/Jing/media/04f99c01-b143-46bb-90e8-1c73ac4883ed

l love how ABX is going to raise cash here to cover their $5b dud gold hedge at $1000 an oz. Nice timing boys...

TOS quotes are not working on my computer.POS TOS

prophet charts are working though

TOS charts are not working as well
they asking for bailout - be merciless

Post from Denninger today:

http://market-ticker.org/archives/1416-An-Address-To-Our-Schoolchildren.html

I have 1/2 ES (down 5) and 1/2 NQ (down 3) and was THIS close to putting on full positions today. Maybe I'm naive but I'm not seeing the bullishness that you all are seeing. I saw a market that went nowhere today. The 2nd lowest volume of SPY this year. I believe it's the lowest volume on the Qs for the year. The past 3 days have been the lowest volume 3 days of the year. I like to follow the money and the Banks (BIX) and Brokers (BKX) were both negative today on a 1% move in the S&P.

Still only in half positions simply because they can shove this up on fumes a little more. But there hasn't been any impulsiveness since Tuesday, which leads me to believe this is still a correction. Still looks like wave 2 to me.

A wave 2 can't exceed wave 1 (1038.75 ESU9), is that right? That makes it a good place to set a stop.

Thanks.

Here’s a CNBC stock_JCG. The guy ( Guy Adami) keeps harping about shorting a $50 to $75 stock at $35--
I'm starting a whole new angle!
Filing this under " Debunking Cramer's cronies"

sorry guys, I was way to sick to trade today so I couldn't drop the market for you

Today we saw energy and commodity stocks up.. I look at this like a defensive play people are shifting into safer stocks.. Worried something big will happen.. Also gold spiking and dollar down (now being announced it will no longer be used as world currency).. Signs of fear.. Lower volume and right shoulder in head and shoulders forming.. I'm bull on energy but bearish on rest of market.. 50/50 until we see a pop in either direction.. Good luck!

I've got a bucket of cash I'm moving from my nearly-zero-interest savings account coming in tomorrow morning, and it's all earmarked for long-term stock purchases. Anyone got any brilliant ideas for crash-resistant stocks/ETFs/CEFs? Dividends preferred.

try some of the treasury ETFs...possibly some high yield preferred stocks but those will prob give up the ghost in a downtrend. cash will be king, some silver and gold coins too. maybe some currency - swiss or pounds sterling in paper bills...

I like JNJ and KMP. MRK has good dividends too.

Similarly, when you say a bucket of cash, what are we talking here? $ amounts not necessary, more like, % of standard yearly salary or % of total investable capital (401k, IRA, disrectionary, the whole thing -- what % are you talking about investing 'tomorrow'?)

I highly recommend you consider that if you are not a seasoned trader, as many of us are not, THE MARKET IS DESIGNED TO TRICK YOU. Historically investors get raped as they are consistently too aggressive near the tops of markets (buying when things look like they're really going well!) only to see them reverse course. Similarly, they get defensive and sell out of stocks at or near the bottom. POOR DECISIONS. Please, if you are inexperienced, remember that if you have a notion - and this is NOT a dig at you or inexperienced investors, as I have made this mistake 3x already in my limited career - then it is likely incorrect as the masses/the herd/the general public/the retail investor (whatever, take your pick) is SO FREQUENTLY wrong. Statistically, you are being tempted to buy because the market is a cruel, bitchy mistress.

Do not gamble with safe money. You simply must have a disciplined, multi-timeframe approach to this 'cash on the sidelines'. I will simply offer this: the entirety of macro data as well as a considerable amount of micro (co. specific) info I know of suggests that equities are going to correct SIGNIFICANTLY downward. I am less than 10% invested as a function of net worth at this point as a hedge against my bearish stance in my trading account. You could say I'm 10% invested, 10-15% megashort via trading, and 75% cash. I will likely remain in cash until SPX 750 where I will begin (by adding another 10% at a time; i'm very bearish so i think we'll see 500-750 SPX before this is over) doing what you're doing with legitimate investment plays.

"i'm very bearish so i think we'll see 500-750 SPX before this is over"

You're mildly bearish. The bottom will be considerably lower than 500. 217 is my target. It's the 1987 low.

First off, I don't need this money. It's not risk capital in the same manner as what I've already managed to piss away on SPY, but if immediately after investing it we hit SPX 25 and I lose it all plus my job I'm not out on the street for quite a while. I don't want to throw it into the meatgrinder, but I'm not depending on it.

Second, I'm not trying to time the market. I don't think there's nothing but sunshine and unicorns in the months ahead or I wouldn't be following this blog in the first place. I generally agree with Mole's predictions of doom and gloom, however there's a non-zero chance that those scenarios will not pan out and I should have a backup plan. I'm fairly well hedged at the moment, but I've got nothing being *hedged*. Once I've seen some confirmation that this market actually knows what "down" is I'll get a lot more skeptical about our current irrational drift upwards.

Third, I'm not going to go on a buying spree tomorrow morning and buy 'til it's gone. I'm going to pick my entries and stick to them, and probably won't even use most of it this week.

Fourth, I know I'm a newbie. Observationally speaking I seem to have more common sense than a lot of people, but I don't trust myself not to lose money I need. This is all a big experiment in an irrational market, and if I can make a few bucks that's just awesome. Also, I realize the irony that right after I make a significant purchase is when the plunge arrives.

I'll keep it small throughout September since all signs seem to point to some major shenanigans in the coming weeks.

Must agree with him - unless you know what you are doing stay in cash or short term treasury notes. Go and buy Conquer the Crash for tips on how to stay safe - link is on this page in the book section.

Thanks mole -- glad to know I'm on the right track.

Anecdotally, I've been approached by dozens of people asking for assistance with a similar task (committing long term capital since we're, uh, allegedly out of the woods of this bear market... i guess nobody worries about bears in the open plains, then, even though they're WICKED fast animals in open terrain!).

This is good news for us, buddy. keep the faith. My friends who work for banks (morgan, usbank, etc) are universally laughing at me for maintaining my stance. Fuck them -- I know who will laugh the loudest, and last.

Your site is a bastion of fierceness in the face of adversity. We can all learn something from you, Mole. Stay cool.

I work for a bank and I think this market is a fucking joke. Not sure if the banks are trying to keep the market up until the end of the year so they can all get paid one more time or what, but I'm pretty sure everything about this market is a complete scam...

S&P covered call fund? ticker BEO

pays $1.10 every 6 months in divs per share. which back in june was more than 10%

a) crash resistant is a difficult item -- WMT, AMZN, and MCD were the only standouts during the real crash. Not that i'm recc'ing those, just saying, those held up ok last time. I'm not sure if they will if we get another crash.

b) why be buying here? are you anxious to get involved? if so, that's a good sign a top is nearby. If you wait for a dip and add, you'll likely improve your pricing by 10% (think of it as a 10% gain) -- you're chasing a rally running on fumes at this point. Investing is perfectly fine, particularly if you are following a long term plan as you say, however, the better the entry, the easier it is to remain in the trade. Consider that NOW IS THE TIME TO BE SCOUTING for investments; SOON will be the time to start putting cash to work (SPX 750-850 if you're ultra long term).

c) if you buy in one big, bulk, purchase -- so help you god. The best strategy is invest 10% of investable capital tomorrow or so with the intent of investing 20% @ 950. 30% more @ 875. and the rest as the 'crash' (or any downturn) becomes more visible -- you need to be able to give yourself the time (and calmness) required to see investments work for you. These %s are rather aggressive; I would consider that it's better to be 50% invested and stay in the trade than be 100% invested, spooked out, and lose money AND miss the investment opportunity.

Just my 2cents -- please reply/explain further if you'd like. Many on this board aren't as long term (that i know of) as you are, however, you must realize you are literally standing on the edge of a cliff, expecting the cliff to continue extending out as you walk forward... this market can at any time reverse course and make you pay dearly for being aggressive and pressing your bets by going long here. You may make 5-10% while the rally continues only to see those gains evaporate (which will freak you out into selling, most likely, at the worst possible time) as the bear market reasserts itself.

Caveat emptor has never been more appropriate.

i hate to admit it but it looks like prechter was wrong to advise staying in cash in july/august bulletins in expectation of wave 3 down ('little upside potential left he said')?

you would say that when market will be at least 10% above current highs (not that I am saying he was right - just ..you are judging too fast)

true, just waiting to see which way thngs go.

Tomorrow is 180 degree's in time from the march lows....

that is a big deal.....

we will see if the market respects this time pivot.....

Hey Mole,
Geronimo performed a little better than the 1.75 you posted IMO... About 1 min after the alert for the second trade went out /ES dumped around 3 handles right down to VWAP... Unless you were super quick I think many got a much better entry than what was posted in the alert. +4 for me today.

Gold and silver are at an interesting inflection point .

Nice complex inverse H&S on gold indicating to just over 1300 with an attempt to break through the neckline now. I have also shown the symmetrical triangle that just broke to the upside:

http://www.screencast.com/users/springheel_jack...

Silver is also interesting. There was an interesting cup with handle formation that failed to break to the upside in June. Silver is now breaking out to the upside again and is paused at prcisely the point that the last breakout attempt failed.

http://www.screencast.com/users/springheel_jack...

Both of these building for more than a year.

I counted 5 waves into today's top for silver. I didn't have the guts to pull the trigger though. An interesting count is developing. If we assume $16.80 is the top, silver fell away in a leading diagonal 1, correction 2, then fell impulsively for waves 3, 4 and 5 to bottom around $16.40. Since then silver has traced out an AB and appears to be in wave 3 of C. Now for the interesting bit.

Silver tends to spike into a top and fall very hard. Given silver's rise over the last few weeks, if this is a top? It would not be unusual for silver to be back down at the low $15s by late this week or early next week. So how to trade this market?

What I like about this set up is that we have a potential tradeable top at $16.80 and seem to be in a wave 2 retrace. Therefore shorting at $16.65 (61.8%) to $16.70, with a stop at $16.83. Downside is limited, but upside could be a wave 3 of 1 (which could be $1.50, guess).

Alternate count is that we are in wave b of 4 of 5 of C of Y of B. This would mean silver makes a c wave retrace and then has one more push higher than $16.80. The problem with this is that it would mimic the bearish count and then bust higher in an impulsive fashion.

SLV http://screencast.com/t/6eUfF4Dd

Thanks David,

Your graph was hard for me to read. What are your conclusions based on the graph?

Since my last post. Silver seemed to finish a 3 wave retrace, with 5 waves in C. Since then, it has fallen in wave 1 and currently correcting in wave 2. Assuming the count is correct. Should start falling harder (If I'm right) later today. I shorted at $16.70, stop at $16.835. Missed the top. Tried to sell some more at $16.75 (dec futures) but missed by 1 cent. Now to test if I am right or wrong again.

sorry, sometimes my charts are messy, I need to have lots of things on to confirm one another,
here is a cleaner one, I think it is ready for abc of up wave sequence and 5 of down wave seq
(I am using D-wave version)
http://screencast.com/t/3T9AnGOlL8

Thanks David,

I think you are saying you think silver is at or very near a top. Sorry, I'm not familiar with D-Wave. Thanks for your responses.

Looks like my Sept puts are worthless; I'm just going to ride what's left of them into the ground. Call it tuition, I suppose.

More promising: SOLD -2 VERTICAL WMT 100 SEP 09 50/52.5 CALL @1.43
WMT is low beta and trading a nice channel lately, and this one's already turning out nicely.

AIG vertical is a little underwater, but that's to be expected considering how far OTM it is (22.5/25). If I hadn't converted to a vertical I'd be profitable already, but I'm being very patient with this one.

what strike? I have 970 target

SPY 97. It's possible, but I'm not holding my breath. Presently my break-even is 96.5; by expiration it'll be 94.9.

tough one - with 97 strike in less than 2 weeks you go to be well in the money to make it back. If I was you, I'd sell if pullback THIS week will take it close to 980+.
Hard for me to tell - I only play front month as lottery tickets with money I am prepared to lose

ZH - Liquidity is being aggressively drained from the system. Might that be why we are
D-E-A-D?

http://www.zerohedge.com/article/excess-liquidity-game-coming-end

Steve

The low was 666....as I just read, tomorrow is 999. So when the book of this crash is written, we will have two astounding numbers to look at.

That far exceeds anything that has worked for me lately. 100% short tonight.

Steve

Steve, that is interesting, and I appreciate your market insights without all the political commentary.

Best regards.

A nice potential H&S is forming... People will not give it credence ( wouldn't it be a nice place for it to actually work). The H&S targets are right around the projections of the ending of wave (iii)...(about 2* wave (i)). This would be negated obviously if we break to new highs. As of right now this is what I am looking at... I am positioned short for the potential fall. Stop is above the 1030 on the /ES. We could gap higher, but it would be foolish to get out of positions right now considering the circumstances. Enjoy the evening folks.
http://content.screencast.com/users/Cerebro82/folders/Default/media/0527f754-2003-4cd8-a36b-c968546f44b7/SPY.png

Holding my Lotteries overnight... SPY Puts & UUP Calls....Should be fun tomorrow.

Hopefully we have seen the end of the POMO operations. Fingers crossed.

i think october is the last batch ( frm the fed comments ) somebody should be able to dig this up and confirm this...i know they said they were scaling back so they are going to be more infrequent for sure.

On October 12th subject to extension the Fed will reduce LTV margin lending requirements on most debt instruments. This tends to reduce the leveraged funds available to those institutions for lending and market intervention. This combined with the curious timing by the FED to reduce/eliminate POMO activity might provide for interesting times. No matter how you slice it, it means less liquidity to the market, borrowers, and for growth. So, the question might be, since this is public knowledge, when will the big guys act accordingly, or have they already?

Yes, October supposedly ends it, Ropey.

The Fed has always conducted open market operations (and will continue to), but the $300 billion in POMO Treasury purchases as part of the quantitative easing program is supposed to finish by the end of October. I believe they have about $20 billion left of the originally declared $300 billion.

Thanks for the specifics, Spud. Good job. :-)

The ideal SPX candlestick setup tomorrow would be a gap up and then close down with a bearish engulfing candlestick for an bearish reversal upside gap two crows pattern.

If we gap down & close further down with a large bodied candlestick then we will have a bearish reversal evening star pattern.

Interesting candles on $NYA today though.

Are they really three white soldiers though? The second and third candles didn't open within the previous bodies.

I was just taking a longer look at that chart, Jack. It looks a lot like the May/June chart in a similar fashion, doesn't it? The only difference is that May/June did not occur after a pullback. I don't think this is a deliberation pattern though either. I wish I had my game on today.

How's your brother doing?

Thanks so much for checking, Jack. He was well enough last evening to send me a message to stop putzing around and get back to trading. I ended up having the biggest profit day today I've had since the middle of August. Maybe I was the one who needed some medicine? ;-)

3 white soliders?
see example at bottom--> http://thepatternsite.com/ThreeWhiteSoldiers.html

Yep, that's the ticket, Douala.

Why so certain that put holders will get screwed overnight? We didn't make new highs and are clearly in a very indecisive territory.

Call it a hunch...

thats what I am sayin! they keep on knocking on door of 1026, soon it will be pushed down and off to newer highs.

yeap especially with a nice gap over resistance like all those other times in the past. Why change the tone of the market now? in reach of the highs of the year.

Because even the bearish sites are expecting it?

They were knocking hard today.

Having got this far it would seem almost a shame not to put in a double top or bounce off the upper channel of the SPX multi-month bear wedge at 1045.

not before pullback

Would like some advice from anyone willing to give it:

I'm sitting on a few SPY Oct Puts at 100($3.47) and 95($2.19), so I'm down about 33% and 50% on each position, respectively. Besides telling me I'm an idiot and shouldn't hold things like these without tight stops, what is my best course of action at this point?

Here's a view....I know its hard and a personal choice but try not to sell at the bottom. Look at this chart....this option may see $3.00 again within a week. http://askins.mortgagexsites.com/xSites/Mortgage/askins/Content/UploadedFiles/SPYOct100PUT.png

And get an avatar...all real option speculators have avatars

I like that chart, just wish I had entered closer to the middle channel than at the top (-:

Hopefully my new avatar (The Stig from Top Gear, for the uninitiated) will bring me glory in the weeks, months, and years to come!

Yeah! We all look for the right entry point. The trick is to learn from
previous trades. Be aware on this one that jumps to the upper level have
started from the lower level.

If you are an option speculator, use a chart to buy and sell.....try not to sell at the bottom, that is what they want you to do.
NOW, establish your pain threshold below 2.1 on the Oct100. If I were selling this one (because I sell, I don't buy unless I'm feeling lucky---which is never), I would be waiting for a high of 3-3.25 or a test of resistance at $2.6 to $2.7. Good volume on that option. It has a long time to work.

Good rules on Options
1. Buy Low, Sell High (I know old school, but fear often negates this one)
2. Know how to hedge an option position, so you may retain profits or minimize losses.
3. Never, unless you want to loose more money, hedge a put with a call.
4. Be aware, you can be raped beyond repair for setting stops on options.... Morning gaps and BA spreads will magnify your losses.

I hope that helps.

It really depends on your ability to take the losses and appetite for risk.

We appear to be very close to topping here. Theta won't be too bad until after opex when they become front month. These may well still turn a profit.

If equities continue upward to the sky for the next six weeks though, you have a write-off. I think that's unlikely but I'm surprised the rally has got this far.

my sane half tells me to get out now, and my evil half tells me to cost-average down. thanks for the perspective!

there is no "sane" or "evil", there is trade
there sooner you will learn to think in terms "trade still working/has potential" as oppose to "I am losing money" - the sooner you'll be making money.
Free your mind from numbers - there is no spoon
I posted few charts above somewhere....

i wouldn't cost average down on a losing position but that's just me - the market can just as easily fly upto 1080 as it can just drop 20-30 handles. Like Jack says, don't know your pain threshold but given you're asking for help i'd imagine you're pretty close to just cutting and running. If you still want to hold onto the position and minimize the risk, define your bias clearly. Remember with options the beauty is the ability to morph the position into something else, you could turn it into a debit or credit spread - depends what you want out of it, either way you define your risk better and if it's a credit spread, you then start collecting theta. Obviously if the market tanks you wont make as much profit but at least you're covering your ass a bit and if the market does go below whatever your tolerance is - then figure out whether to close out and move on or do something else. I see too many folk ( myself including ) just doing straight long calls and puts, it's the simplest thing to do and ironically usually the worst thing in the majority of cases...there's a time and place to use them and it ain't in this tape imo.

Anyway just to cover the point above i'd highly suggest you look at the TOS Risk Profile on your position and wind the date forward, try a few prices - see how the position reacts - are you comfortable with that loss, this will give you a great feel if the market drops down to say 101 next week or rallies to 105 or whatever, it'll give you a reality check. I do it all the time and it helps me alot.

I had oct 95 and dec 85. Closed them all out today with similar losses. For me personally, when it comes to options, I give myself a very specific path of how the trade should play out after I get my desired entries. If it does not happen, get out as decay will kill you. I have held out quite a bit with those puts and was hopeful that the past few trade days had been sideways distribution.

At this point the market is on the edge of making a decision to either go higher or lower (yes it can rain or it can stay dry) - almost a gamble. Rather see myself on the sidelines and get in later with a higher probability then risk loosing more. If we go higher shorter term OTM puts will get killed. VIX going lower, prices going higher.

Not saying you should close out, but be cautious and use a very specific plan when trading options. I know its no help now after the fact, but take it as a learning experience. And who knows, I closed all my puts too, good sign of the market dropping BIG tomorrow.

tell me about it... I closed out some $100 oct calls in the morning (-5%) last friday... what a horrible move that turned out to be!! :-)

going to do some hard thinking tonight and watch futures for some guidance. thanks!!