August 22, 2017

Patience is the Key to Options Trading (at least at

Just a few short snippets today and not much else.

Well, the losses today wiped out the gains from late last week. I guess one encouraging statistic is that in past when the S&P declined this sharply on a Monday the return over the next three trading days was positive but only slightly. So, given the recent price action and the fact that we are in a bear market I will not hold my breath. I still think the July lows will eventually be tested and possibly breached, but that is pure speculation and more of an intermediate-term outlook. My true focus and the focus of my options strategies is to find extremes in the market. Lately the major benchmarks and the sectors I follow just want to sit in a neutral state. That is fine, extremes will hit the market as they always do and I will be waiting patiently to jump on those opportunities when the arise. Remember, patience is the key for long-term success in options trading. My performance speaks for itself. Just check out the 2+ year track record for the ETF Extremes Options Strategy.

  • The NASDAQ 100 closed near the low the trading day so we could see a gap opportunity in the Gap Fade Options Strategy. I would love to see signal that is for certain.
  • Will the S&P hold above the 1260 low from last week. If not keep a close eye on 1250 because a breach and hold below that area could spell trouble and a retest of the July 15th low. Sorry Cramer.

Have a great night!


Overbought-Oversold levels for August 25, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 40.0 (neutral)
* Dow Jones (DIA) – 37.5 (neutral)
* Russell 2000 (IWM) – 41.4 (neutral)
* NASDAQ 100 (QQQQ) – 35.6 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 30.9 (neutral)
* Consumer Discretionary (XLY) – 41.9 (neutral)
* Health Care (XLV) – 39.9 (neutral)
* Financial (XLF) – 38.9 (neutral)
* Energy (XLE) – 51.4 (neutral)
* Industrial (XLI) – 40.2 (neutral)
* Materials (XLB) – 38.9 (neutral)
* Real Estate (IYR) – 35.7 (neutral)
* Retail (RTH) – 46.5 (neutral)
* Utilities (XLU) – 52.1 (overbought)

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