Trade update: Sep 2009

The long awaited pullback - on volume - finally came. Today the VXN increased 2.35 points or 9.31% while the NDX lost 46.69 points or 2.90%. I am watching the Sep 1300 and 1250 puts for a trade - the 1300 put can be sold for about $3 and the 1250 for $2. I don't view this pullback as caused by another black swan event or financial crisis, rather just as an overdue pullback after the recent market highs - profit taking has been long overdue. There are multiple levels of support below, which are sure to draw in more buyers than sellers, at least for a time. I don't believe this pullback will be too quick and powerful, more like slow and drawn out, as people realize that the economic realities of the day don't support such high market levels. In the mean time, I plan on placing trades tomorrow to take advantage of the higher volatility premiums that can be found in September puts that are 20% or so otm.