I’ve mentioned my put position on XME. This morning, I took advantage of weakness earlier and sold my January puts so that I only have March now. I intend to double this March position in the near future. The reason is simple: I think this beast is heading much lower, but it moves with the speed of Oprah Winfrey at the 24th mile of a Marathon.
The above analog between the last major downturn and the most recent history is the basis for my position. It took five months the last time we did this pattern to make an intermediate low, and it took three years (!!!) to reach its ultimate nadir. In other words, having options that don’t expire for almost 150 days is just what the doctor ordered.
The second chart, above, takes advantage of SlopeCharts’ ability to expand in any of the four directions to illustrate the timespan I think will be required for this thing to hammer down. I intend to be terribly patient with this one!
On a totally separate note, my NFLX puts (yesterday) and CMG puts (yesterday) did great. Sadly, it’s just virtual money, but I still have a feeling of victory.