July 21, 2017

Still Hovering in a Short-term Overbought State Nears the Highs – Could We See A Double Dip?

Roughly one week ago we exited what would be a profitable directional trade in XOP.

XOP had climbed into a short-term overbought state, so I decided to short the ETF using puts. Now typically, I am a seller of options, but the set-up was just too good to pass up for an aggressive style trade so I bought a few puts. The result was a 74% gain over just a few trading days. While I’m not going to anticipate similar results this time around, I am excited about the opportunity ahead.

We are greeted with what looks like another opportunity in XOP among other ETFs. I reluctantly did not place any trades today, although I was tempted to place a trade at the closing bell. So, hopefully we see a relatively flat open so I can make a few high-probability, Mean-reversion trades. Subscribers stay tuned!!!

10-28-2013 4-31-11 PM

If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days.

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Kindest,

Andy