From August 7 to August 18, we dropped almost 28% from the high. Another drop like that will take us down to the 55 level. All we need is a 3% to 5% correction in the market which we have not had for quite a while. I am not predicting that event but September and October can be bad months for the market. That is why I am covering many of my put options and raising cash. If we get a pull back I want to take advantage of it.
I have had a nice year so far and don’t want to give it back if we get a violent correction. After the expiration today I will be 42% in cash and after the September 15 expiration I will be 54% in cash. I will still have put exposure in December and January from 22.5 to 50 on the SVXY but I think I can live with those positions if assigned. In the mean time I will continue to take risk off the table. Sorry if this is wrong or boring.