On Thursday, we managed ETF liquidations and parted ways (with such sweet sorrow) with half of our $GLD position. Rules are rules, and while GLD is grinding through a relentless sideways consolidation, other more cyclical parts of the economy are outperforming on a 3 month basis. We waited until today to buy, giving the crazy single day self off a chance to self correct. Our intermediate time-frame trend following rules can frustrate us at times, our delta neutral option strategies can crush our hopes and dreams at other times...and when the two combine to inflict max pain and suffering, trading life can become overwhelming if not life-sucking. Yet, we maintain devotion to our one and true overlord - our trading rules. With strangles inverted and rolled, offering little in the way of defensive management options, we really have just two choices. Option 1: do nothing and count on a "Ray of Light" to shine through the S&P's extremely overbought condition to clear a management path to a roll forward for added credits while inverted. Option 2: Be thankful for this week's positive delta additions to our mostly tech stock portfolio. May it help us hedge against a continuation of the relentless one way move to the upside. But, if not, accept liquidation of SPY inverted sold puts at a loss as next week's planned sacrifice to the Gods of losses. Because, thou can't roll forward unless thou does so for a credit. But, as thou looks at overnight futures price action, thou can see clearly now the "reign" is on. We may be getting our pullback. Crazy market.
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January 2021
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