WalMart Bear Market Ends

We analyze our positions weekly to determine their trend. The Walmart trade turned against us soon after we opened the position, as our position was based on the current trend when we started, which was a bull. Within 2 weeks, bull turned to bear. There are some obvious choices when this happens. You can close the trade and get out, which would have worked well. You can just stop adding to your position and let some time pass. Or, you can continue adding in a very cautious way as you determine if the new bear will be short lived. We chose the latter, and the bear market continued to work against us, lasting about 9 weeks.

We use a position size limit that is based more or less on total number of contracts and total exposure of any one symbol in the portfolio. As the WalMart position grew and the stock languished in a bear market, we eventually reduced our number of contracts and/or stock owned. It was hard to imagine an extended bear market in Walmart after the winter had ended. Here at DeepPocketOptions we try very hard not to be attempting to predict the future. But, sometimes things seem so obvious that you just can’t resist. Our feeling was that WalMart and retailing in general would pick up in the spring. So, with a reduced position size, we waited.

On March 21, WalMart returned to a bull market trend. It appears to be continuing, although not all of our indicators have confirmed this trend…..yet. The plan now is to continue the position and add to it from a bull market perspective. We like to sell puts, using our formula, on days when the stock is down. Even within the strongest bull markets, you get down days. That is where you get your opportunity to sell some puts at a very good price.

DeepPocketOptions members get all the details of concepts that are mentioned above. At our maximum loss point, we were down about $2500, so think of it this way: Would you risk $2500, with a proven plan, in order to create a position that pays you $300 a week? Those are good numbers. We teach it all right here. Join us.


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