Remember, This is a Marathon and Not a Sprint
May 28, 2009
Yes, I am finally back on the blog after what seemed like an eternity on the Insiders Page. For some reason it is just much more fun writing on the blog and I hope it inspires me to write more frequently in the future.
As for the strategies, well, it has been quite some time since our last trade. While I am not concerned (just look at the overall performance over the past three years while the rest iof the market has been tumbling) I know many of you have issues with the lack of trading. As it states on the website, the ETF Extremes strategy can go months without a trade, ultimately it is the long-term performance that matters. If you are looking for a short-term fix then this is not the strategy for you. I have seen way too many options strategies do well over a course of a few months only to blow up and then proceed to take heavy losses. I will not accept that as a strategy. I am in this for the long haul. Remember, this is a marathon and not a sprint.
Overbought-Oversold levels for May 27, 2009
ETF Extremes Options Trading Strategy
* S&P 500 (SPY) - 46.3 (neutral)
* Dow Jones (DIA) - 43.6 (neutral)
* Russell 2000 (IWM) - 52.0 (neutral)
* NASDAQ 100 (QQQQ) - 60.6 (neutral)
Other ETFs
* Ultra Long (SSO) - 45.7 (neutral)
* Ultra Short (SDS) - 51.5 (neutral)
Upcoming Holiday Bias and the Iron Condor
May 19, 2009
The market shot back up today and into what I consider an area of strong resistance at the 910 level on the S&P. As seen below the indexes are currently near an overbought level so I expect to see a short-term pullback. Moreover, we are entering a period of holiday seasonality that has historically displayed a bearish bias leading up to the holiday and a strong bullish slant two to five days after the holiday. I think history could repeat itself again this year but nly time will tell. For the moment, I am watching the 910-875 are in the S&P and a breach and hold above/below those levels would lead me to look further into the next short-term move.
A move back to a firm neutral state should lead to our first official Iron Condor trade (Insiders Only). I will have more details about the specifics of the trade tomorrow, hopefully intraday, but don’t hold me to it.
Overbought-Oversold levels for May 18, 2009
ETF Extremes Options Trading Strategy
* S&P 500 (SPY) - 60.7 (neutral)
* Dow Jones (DIA) - 64.1 (neutral)
* Russell 2000 (IWM) - 56.5 (neutral)
* NASDAQ 100 (QQQQ) - 60.6 (neutral)
Other ETFs
* Ultra Long (SSO) - 60.4 (neutral)
* Ultra Short (SDS) - 37.2 (neutral)
Upcoming Trade???
March 23, 2009
What a crazy day! However, even though the gains were tremdendous the overbought/oversold indicators have not reached an extreme. We have not seen an extreme in well over a month, but as we all know from the ETF Extremes performance over the past three years, patience pays. So, hopefully we see an adidtional push over the next day or two so that a short-term overbought extreme occurs so that we can take a position in the ETF Extremes strategy.
As forthe Iron Condor strategy, we had our first successful trade several weeks ago and know I will look carefully to find another opportunity for our next trade. Ideally, I would like to see a push back into neutral territory in SPY and then I will start to look at the prices. I will then use a delta between .10 and .06. I will talk about this further over the coming days. Stay tuned!!!
Have a great night!
Andy
Overbought-Oversold levels for March 23, 2009 for the ETF Extremes Strategy (available only to subscribers)
