SPY PUT Getting Ready For Monday

This is going to be a busy weekend for me so I thought I would post my plans for Monday and into next week before updating my options trades from Friday. Friday was another excellent options expiration but I did a number of trades on Friday which I will have to post early next week.

Today’s down move had to be expected after yesterday. The fact that the market didn’t fall further could be because of it being options expiration today. Meanwhile there was lots of opportunities for my spy put trade to be put into action again.I don’t have the opportunity of posting my charts until I am back home on Monday as I am publishing this report from my new handheld, but just before 2:00 PM on Friday I purchased 20 SPY PUTS Jan $122 with the SPY trading at 122.45 for $5.91.

I bought these contracts as I am expecting more weakness Monday as it is painfully obvious to most investors that the European Union is not in fact a Union but a disorganized band of politicians with personal agendas and the inability to work together. No amount of rumors will quell this mess now and I do believe Germany could actually be the country that collapses the common currency by its inability to work with the other countries in resolving this debt crisis. The fact that France holds the majority of Italian debt can only bring pain to France. Bond yields in Europe are rising, signalling that the debt crisis is probably entering a dangerous new phase.

It’s like a game of dominos and one by one each country is being toppled by the debt crisis. The chance that the market can rally early in the week is certainly possible, but investors must ask themselves, to what extent can any rally be sustained with the mess Europe is in. I would prefer to have some protection over the weekend and should the market manage to hang on come Monday I would prefer to have losses from my spy puts than not be ready for a huge pullback on Monday. I am not expecting any kind of collapse, just a grinding day lower.

I will be back Monday morning and ready to trade. I will do my best to update all my trades including my spy put trades. I plan to remain cautious going into next week after so many of my Nov put options expired out of the money yet again. I will beholding off on putting more capital to work in put selling next week unless I see the market stabilize with strong technical indicators as presently I will not be surprised to see some heavier selling as the week progresses.