I started building a position with the USO Jan 2017 $15 calls.  I have no idea where the bottom for oil is, but $40 WTI doesn’t seem sustainable because that is below cost to produce in many parts of the world.  2017 should give close to a year without significant time decay.

The market has continued to deteriorate and I’m glad I resisted the urge to cost base anything down.  The only new positions opened in the last couple weeks are USO and TWTR, both out in 2017.

The last of my BABA is basically at zero now, still made some money on this trade but not as much as it could have been if I didn’t re-enter the position.

DIA is likely a zero as well, but the VIX spike allowed me some good profit to take the sting out of this one.

This market needs two things to break out of this grind in my mind.

1. We need to get the 10% correction that the technical traders are so desperate for.  The good news is that we are approaching that number now, by my rough calculations that’s about 16500 on the Dow.  That’s only 600 points away right now.
2. We need the fed to raise rates off of zero.  I don’t think they will do it in September but I really wish they would.  No one knows how the market is going to react so everyone is just sitting on the sidelines waiting.  Likely we will have to wait till December.

If we can get to a 10% correction before the September fed meeting and then we get off of 0% then I think we could have a mild rally back into the rest of the year.  I’ll probably start buying some S&P 6 month calls if we can get the 10% correction.