I'm not sure why I'm even writing this message, maybe for ideas for improvement in my strategy.. maybe just for pure moral support.. or something, but for whatever reason I feel compelled to write! I've been doing pretty well trading puts on the fading homebuilder stocks the last few weeks. Mostly TOL and DHI. TOL had been the more wild swinger as of late, and I had the feeling I may have overstayed my welcome as far as homebuilder puts went, I closed out all my positions and covered my short on TOL on monday, but then got a hankering yesterday and figured I'd grab a few DHI contracts (NOV 35 Puts) since it hadnt been too volatile and it might not get away from me too fast should things go against me. What the HELL happened today (Wednesday)?! The damn stock just would NOT stop going up! For the life of me I couldnt find any news I felt was sufficient for that kind of movement, and like a moron I kept holding onto the puts trying to figure out what was causing the movement, so i could gauge how lasting the effect might be and how solid the movement really was. Finding nothing of substance, I saw how cheap the puts had become.. and decided to grab a few more! Bad idea... and I had just read and agreed with a thread on here with regard to never averaging down. And yet I did it anyway! I really need to develop a set of hard and fast rules to adhere to so that I dont have to sit around and ponder while I get slaughtered. Something just kept telling me that the run in the stock had to end.. but it kept moving up till the closing bell. More than 7 percent! Is it all optimism over rebuilding from Katrina? DHI doesnt even list Louisiana as a state that they build in. And if the true Damage of Katrina is the estimated 26 billion dollars, I'm willing to bet that less than 10 of is damages to residential structures and their contents, and I'm also willing to be that half that 10 is in the contents, and not the structures. The remaining 5 billion in damages (what of it actually gets rebuilt at all) will be split up amongst all the builders and repairmen in the region.. so how can we justify such a large movement in this particular builders stock on that basis?