OPNewsletter is on track for a 20th positive month (out of past 21 months since I re-opened OPNewsletter in Jan 2008; a period that includes what is termed as one of the most fearsome bear markets of all time). All the 3 portfolios are making money. Overall, we invested a maximum of 81.9% of capital and our gains are +6% (x-commission) and +4.78% including commissions.
An interesting two weeks! A fun fact- Had we not done any adjustments since Oct 28, the OPNewsletter would have been up to a Phase-2 record +20.7% by last Friday close and we still had two weeks to go!;
In the hindsight, it seems it was not necessary as markets have been finding support at 50Days EMA ever since the bull ride began after Mar’09 lows (see attached chart). But every pullback needs to be taken seriously, the down volume was increasing, number of distribution days were increasing, dow theory has been indicating a negative divergence (and still is) and there is no volume sponsorship on the up days, so I can’t take chances especially where there hasn’t been any significant pull back in this >+50% bull ride; at OPN preserving capital is preferred over potential to make more. Hence, we did make the adjustments which thus lowered the returns. Trading with discipline knows no coulda, woulda, shoulda.
From this week on, I shall also start sharing an educational article (not necessarily from OP) that you may visit to continuously build your options knowledge horizon. If you would like to share an article that others may benefit, pls do let me know by writing at OptionPundit@gmail.com; This week, I am sharing an article explaining Implied Volatility.
We shall either start wrapping-up or roll portfolios this week; and also begin our search for Dec portfolios.
If you are not an OPNewsletter member and would like to sign-up, pls click here to sign-up for the waitlist as OPNewsletter subscription is open via invitation only as this will be appropriate time for Dec portfolios.
Profitable Trading, OP