Third Straight Month of Gains Since The Adjustment

The November options expiration cycle ended today and our strategies continue to make strides.

The SPX Iron Condor strategy made another 7.9% over the past four weeks. This is the thrid straight winning trade since we adjusted the strategy to go with a high probability trade. We have averaged 260 points ranges over the past two expiration cycles. With the VIX hovering around 25 we should be able do the same if not better during the December cycle. December is a five week cycle so we will wait another week before we establish our new SPX Iron Condor position. This means that you ahve one week to get into the strategy before we place our next trade. Our newly adjusted Iron Condor strategy has made 25.1% since the adjsustments were enacted and a winning ratio of 100% (3 out of 3).

Our SPY Diagonal LEAPS strategy experienced an interesting month. We will go over the results in detail in the expiration report due out this weekend. After all was said and done the strategy lost roughly 3% over the course of the four week cycle and is up 2.5% over the last eight weeks. We decided to let our options expire worthless, so we will be adding short positions Monday. We did this as a worst case scenarion for the strategy. We wanted to show subscribers how the strategy would react during a steep decline.

As I stated in yesterday’s post, Thanksgiving is next week and historically the market performs very well the day before and the day after the holiday. The Stock Trader’s Almanac states, “long into weakness prior, exit into strength after”.

They go on to state that

“for 35 years the combination of the Wednesday before Thanksgiving and the Friday after had a great track record, except for two occasions. Since 1988, Wednesday-Friday lost six of eighteen times with a total Dow point-gain of 502.41 versus a Wednesday-Monday total Dow point-gain of 704.77 with only four losses. The best strategy seems to be coming into the week long and exiting into strength Friday or Monday.”

Overbought/Oversold for November 16, 2007

S&P (SPY) - 38.8 (neutral)

Russell 2000 (IWM) - 32.6 (neutral)

Dow (DIA) - 37.4 (neutral)

Nasdaq 100 (QQQQ) - 40.5 (neutral)

We work hard to bring you our latest views, opinions and research on a daily basis. If you are a loyal reader and find our thoughts useful please show us your support by joining our newsletter service. We currently follow 3 stock options strategies in our investment newsletter, the ETF Extremes, SPX Short Iron Condor and SPY Diagonal LEAP.

If you want to an in-depth, step-by-step look at how we trade our strategies purchase our acclaimed E-Book! With your purchase you will receive Two Free Months of our investment newsletter plus unlimited access to our Insider’s page enabling you to follow our strategies as you learn. What do you have to lose? Join today!