Small Cap Network Blog

I know hindsight is 20/20, but I still wish I would have waited to get into my Russell 2000 puts until today. The Russell closed 1.3% higher, and rather than the $20.40 per contract I had to shell out, the September 730 puts (RUTUF) could have been bought closer to the their closing price of 16.50.

Still, I like the trade, and I like my entry from yesterday - today could have just as easily been pointed the other way. If a little durable goods orders data just delays the downtrend a day, so be it.

Two things are keeping me encouraged.

The first is, did you see how all the indices backed off from their highs? The inability to hold into gains - particularly after a two-week pullback - hints to me that investors really aren’t ready for stocks to recover yet.

The second encouragement is volume…or lack of it. Today’s modest gains were made on weak volume - a trend that’s been in place for several days now.

Bottom line - no reason to worry yet. I’m down roughly 20%, which is nothing for an option.

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