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SPDR Dow Jones Industrial Average Message Board

  • meanscreen2000 meanscreen2000 May 16, 2007 9:01 PM Flag

    How I'm playing the DIA

    I have been buying June DIA puts since 13,100.
    I am taking a real beating.
    I have positions at the 129,131,132 strikes.
    I have further positions in the July 133 and 135 puts.
    I am down on my June positions an average of ouch...50%
    Normally I would stop out earlier, but I kept telling myself, they can't keep driving this market up on one weak report after another, and more so, drive it up wildly on the slighest bit of good news in a bag of bad news.
    How long can they spin gold out of straw?
    I've never held a position so close to expiration, but I can't wait for the S&P to make its double top to signal a market selloff. I may fold on the first sign of weakness to protect capital, and ride the July puts for a nice profit. Any thouhts here?
    I would think anybody on this board is quality trader and poster, unlike the conventional stock boards.

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    • Hey Meanscreen2000,
      I'm also in on some DIA puts, and unfortunately it looks like we are in for more pain on the open today, as the Dow futures are up 55 on no reason yet again.
      Like many others here, I think the market is overdue for a pullback (at least a 3-5% downside breather), although I'm starting to question the timing of it. This crazy run up reminds me of when I was trying find the top in 1999-2000, and just when I thought it made no logical sense for the market to keep climbing, it just kept going and going. When the crash eventually came, I was already wiped out of my put positions.... sure hope that doesn't happen again here.

      Remember: There will always be other trades out there, so don't mortgage your future by putting too much into this one.

    • Just buy the DXD, like right now. DOW just went from 11,900's to 13,500 plus, this is my only trade right now.

    • This is the current bull market's last run. It is very similar to 1999's. At that time the market seemed to be on the edge of a crash. But it ended up with 8 more months up run, long enough to wipe out most of the bears. If I were you, I would take loss and sell half of your put positions. Save every penny and live a thrift life in the next 18 months. This administration will use every trick to keep stock market float to prove the next crash is all Democrats' fault. Anyway, you should begin to buy DIA puts back when DOW hit 14,000. But do your most buying either at 14,500 or 15,000.

      The best bears can do now is to hold the cash, stay put, not being tempted to buy any puts even it looks so delicious. Just remmember they print more money to make index higher every day until the government changes hand.

    • Your trading strategy--and your assumptions--border on the insane. Did you ever see the movie called "Defending Your Life"? It's a great flick. Watch it this weekend and try to see what you're doing through Heaven's eyes. :)

      There is only one way to trade that has a rational basis. Wait for a signal, and then realize you may still be wrong because tops are extremely hard to call. The absolute best get it wrong. So take a position when clear, objective criteria are met. When you buy, commit to a maximum allowable loss, and stick to it.

      If the market does not correct hard this coming Monday, get out. Make no assumptions about anything. If you think this market can't go straight up for 10,000 points, think again. This sounds insane but go look at the Nikkei in 1988 and '89, the NASDAQ in 1999, and the Shanghai in 2006/2007 (see $SSEC on stockchartsdotcom. We don't know all the forces driving this market up, and we certainly don't know the total amount of money that could pour in from various sources to keep this market driving higher. It takes honesty, humility, and objectivity to admit what we DO NOT KNOW.

      A significant market correction could begin on Monday, and if it does, you will be rewarded for your risk taking. Then you will be tempted to think you know something, and the next time the market will just take your money back.

      Good luck. It's the greatest game in the world.

      Black

    • I bought June 134 Puts today. The Dow can't go straight up. We're due for a pullback at least to the 10 day EMA soon.

    • DIA overoverover due for correction

      Question is when?

      I will say Monday!!!!!!!!!!!!!!


      Everyone one will think new high on this weekend says

      GEE WE push the dow too much!!!!!!!!!!!!!!!!!!

      lol

      • 1 Reply to marketcrashcomming
      • I think you're saying monday out of speculation. If and when the market is going to go down is just about anyone's guess. Personally, I would like to see the market go down, it would be healthy, but in reality I don't think it will. I think we won't see any kind of major pull back til around 13,800 to 14,000, because it's being pumped by outside money, and companies have reported better than expected earnings.

        The dow going to this level has everyone thinking of the nasdaq when it was around 5000+, now the investor thinks a major correction is under way, thinking the past is going to repeat itself and that's the biggest mistake the average investor makes. Just when you think things are going to go in one way, they go the opposite way.

    • "How long can they spin gold out of straw?"

      until they get all your $$$$$$$$$$$$$

    • i would also point out to you, that japan is pumping liquidity into the us market. the so called yen carry trade. Notice, how when jpy goes down, market keeps on going up?

      direct corrlation there. eur/jpy chart looks just like dow. asian countries are keepign their interests low.... and the flood of liquidity chases after stocks.

      China bubble is spilling over to dow. I watched the chinese market, it is amazing. up 2% day after day...

      Never two down days in a row... this is what is keeping dow up. supposedly, dow is making most of its money in other countries?

    • well, that's how it works. shorts are getitng killed on the dow. There are a lot of short positions on the futures market (YMjune) dow contract.

      I think you should just take your losses. It'll keep going up to 14000 before month ends.

      if everyone's looking for a retrace... it's not going to happen.... I'll keep an eye on this thing.

 
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