5 results for tag: fear


XLP, WMT, Jan 12

XLP was mostly unchanged today, so we did not try to add to this position. The 4 contracts in our small portfolio (under $4k account) are starting to earn a little profit. This is exactly what we expect for a vertical that is about 5 weeks from expiration. We are waiting patiently for time decay to work it's magic on this position. Patience Produces Profits. Our short WMT puts were expiring in a few days. We placed an order to close them at 5 cents, and it was filled. Entering a closing option order at 5 cents or less is commission-free at ThinkOrSwim. We originally sold the put contracts at an average price of 45 cents, closed them at 5 cents, ...

Ignore it.

The market is up big one day, and then down big the next day. We try our best to ignore it and trade according to our plan. You know Warren Buffett always says that he doesn't pay a lot of attention to daily market swings. That is not his plan. He buys good companies cheap, and waits patiently. Of course, he has enough power to influence the Board and the operations of said companies, should he choose to do that. On the other hand, some people DO trade the daily swings, and that is their plan. They like the excitement of the quickly moving game. This is the game that most people fall prey to - and they lose everything as they watch their account being ...

What to do on a big down day?

Trade according to your plan. Ignore the noise. Know exactly how your account makes money, and keep doing it. You cannot see your account value increase every day, or every week, or every month. But, you can take correction periods like this one and do the things that set you up to make a lot of money when the selling ends, which it will. Look for opportunities. Today, we increased our new XLB position and it's now down $167. We adjusted our WalMart position by rolling all of our short puts out to the MAY2 weekly expiration. That position is now down $520 with continuing daily time decay of about $27. Please stay tuned for the lessons that will ...

New trade opened today.

We look for things that are obvious, without listening to all the talking heads. It's so easy to be distracted by the noise on the TV and in the financial press, and you can miss things that are staring you right in the face. Today was a nasty day with the DOW down 1.6% and the NASDAQ down double that, or 3.1%. It would seem that the train has come off the tracks. However, when we look at the relative strength of the Select Sector SPDR's, we see an interesting dichotomy. Outside of the XLU, which has the best relative strength due to the selling (and the flip-side buying of yield) we notice a different picture. The XLB (materials) and the XLI ...

Staring down dragons…..

I like to use the Deep Pocket Options blog to teach a little bit about how traders think. The market has been down in a somewhat disorderly way since the third week in January. There has definitely been some panic selling in certain symbols and sectors. Retail is down big (we trade the XRT), Boeing has been sold off savagely, just to give a couple of quick examples. Downturns like this one, where there is no clear reason for the fear but many cloudy speculations about the future, are usually great opportunities. There is an old Chinese proverb that goes something like this: "When you see 10 dragons coming down the road, 9 of them will never get to ...