Huge tug of war here in the 895-910 range. There has been massive selling, but it has not yet broken the rally - certainly testing it very hard though. Whoever wins out here should determine the move into the close and the tone of the next few days. Because of the increased risk, I've sold out half of my longs and am going to wait for a break above 920 before buying back.
Once it broke below 885, I went short and thought I'd set trailing stops at 10% because of the wild swings, lol all of them got hit on the little rally and I lost 10% on each position, ugh...feel like I should have just not set stops or set them even looser.
I would consider NOV calls on XLF below 14; C below 13; JPM below 34; BAC below 19; QQQQ below 27, and possibly INCT below 13.5 Nov option period is a longer one - Nov 1st is a Saturday, the first Friday is on 6th. These options will be held for about one week only, trying to sell them back with VIX still above 40
"DOW SP500 Nasdaq 100 bottom october 2008 (second chance" "11:14AM october 16: with NDX at 1194, we are at the BOTTOM. " Source: the blog of the greatest market timer of all times (past and future). riskfreetrading
when vix increase to the moon delta of puts heads to zero because delta of corresponding calls goes to 1 (This is not a typo). If vix decreases, you have the other effect. Sell puts. I like them ITM. more explanation in rft's blog.
QFT Now is a great time to cover. Better to cover now when the dow is below 12,000. The economy is driven by consumption, rising income, and consumer debt. None of those are affected by the non crisis. Credit card spending for example not affected. All the BRIC countries are also not seeing a slowdown in consumption. The next 12 months are going to be huge. Google will surge, too.