The Dow Jones Industrial Average dove 230 points yesterday in the first trading session after the long weekend. And I suspect it’s just a glimpse of more selling pressure to come, since there is now a definite risk-off tone to the markets.
While this is good news for your inverse ETF positions that track the Dow and S&P, our bearish bet on Home Depot Inc. (HD) is NOT succumbing to the same selling pressure. Why? Blame it on Mother Nature.
Damages from Hurricane Harvey are estimated at $130 billion and still climbing. Worse, Cat-5 Hurricane Irma – the most powerful Atlantic storm on record – is now bearing down on South Florida.
That’s the only explanation for why HD shares are bucking the weakness in stocks. It doesn’t pay to argue with Mother Nature, so it’s best to exit your HD puts now and salvage the remaining premium.
But keep HD on your bearish radar, because when this temporary hurricane boost blows over, it should make sense to target it again.
Here’s what to do right away:
Sell ALL of your October 20, 2017, Home Depot Inc. (HD) put options, with a strike price of $145, symbol HD171020P00145000 at $0.80 or better to close. This order is good-till-canceled.
Hold all other open positions and stay tuned for more updates.
Good investing,
Mike
