July 21, 2017

High-Probability, Mean-Reversion Options Strategy

I hope all of you with a bearish lean are surviving this absolutely crazy market. I know that it has been the most difficult month for the High-Probability, Mean-Reversion Options Strategy in since its inception. The ongoing nine day rally has pushed both of our positions in losing territory, yet I am still confident that the performance will improve as we move towards the latter part of the month. No one said trading was easy, especially options trading, but it is all about perseverance . As for the Theta Driver Options Strategy we are well on our way to the third straight month of gains.

All of the major indices have moved into short-term “very overbought” extremes, while hitting strong overhead resistance. Moreover, we have two large unclosed gaps in all of the major benchmark ETFs. Combine all of the aforementioned and the high-probability move leans heavily towards the downside. But, as we have seen over the past few weeks the market sometimes has a mind of its own.

I will be back with a lengthier discussion in the weekend report due out Sunday, including the overbought/oversold indicators. Stay tuned!