Doubling Down

Never in the history of the stock market has a sell off not reversed itself. I know that is stating the obvious, but long term, we all know the market will rebound. To borrow a Kudlow phrase, it truly is "the greatest story never told."

So this morning, I doubled down. I am "all in" as they say in Vegas. Buying the dip is a time honored tradition and I have confidence in the stocks I own that their future outlook will be bright. It really is that simple. Stocks are on sale and the only thing worth debating is not whether they will go up (they will), it is when.

And there is the rub. When you are buying options, timing is critical. So yesterday, feeling that the market would continue to move south, I bought SPY puts and AAPL puts and planned to daytrade the trend. While it all sounds really smart of me a day later, the problem is that yesterday confirmed that I am much better at the long side than the short side.

I get "happy feet" when I am short. The discipline and conviction that I have when long disappears when I am short. Two head fakes to the long side later and my trading results for the day are underwater. I was a "weak hand" with my puts and whenever a reversal looked imminent, I bailed. With heavy volume and cross currents going on, it is impossible (at least for me) to effectively follow the ball and see the trend.

Even this morning, I shorted TIE and bought SPY puts again. The TIE trade worked, but I jumped off again for only a scalp and the SPY puts ended with a small loss. It is time for me to quit pretending that I can daytrade this kind of market and commit to the long side at this point.

The last of my cash went into AAPL calls. I bought more AAPL Dec180 calls. It was between AAPL and PCP for my last amount of cash and I chose AAPL. We shall see. I see the market turning today or Monday. Regardless, I have conviction that this dip is less of an issue than last August. The uncertainty is bullish after a while.