Patience pays off again. Are you starting to get the idea of how I trade?
The Sector ETF Extremes options strategy has its first trade.
Late in yesterday’s trading session a signal was finally triggered
in the Sector ETF Extremes. It was the first signal since the strategy
was initiated on June 16th. XLF had moved into a “very overbought”
state and my shortest-term proprietary model was reading an extreme
state so I sent out a trade alert to the subcribers’ of the Sector ETF
Extremes options strategy. The position was XLF Dec08 23 puts (XLFXW) for $2.55.
Early in the trading session the market turned decisively lower so I decided to take a 9.8% profit off the table. Check out the performance page.
Certainly not a bad day by any stretch, but by the end of the day I had
left an additional $.65 on the table. So, what was typically a nice
gain for any strategy (9.8%) could have been much, much better (35.2%).
As many of you have pointed out my market timing has been impeccable
with the Extremes Strategies and believe me I appreciate the kind
gestures, but that doesn’t hide the fact that I am still kicking myself
a little bit for taking profits so early. This is why winning sometimes
hurts.
Someone once said that any profit is a good profit, well, I am not
so sure that I agree with that sentiment. Yes, I am happy by the end
result today, but my goal is to be perfect. While I realize that this
is an impossible task, particularly in the world of trading, it never
hurts to strive for perfection.
So, after the sharp decline today the major benchmarks I follow have
moved back into a neutral state. However, there are still a few Sector
ETFs that have my attention. Utilities (XLU), Energy (XLE), and the
Materials (XLB) sector remain in an oversold state, but my
shortest-term overbought/oversold measures still need to confirm so I
would need to see a further decline over the next few sessions for
another signal in the Sector ETF Extremes to be triggered.
Until then enjoy the profits and stay tuned!
Have a great night,
Andy