On 8/27, a month ago today, a post was created (see post) to purchase the Home Builders ETF (XHB). A month later this position is going to be harvested, decent gain of slightly more than 10%.
Bull…Bear… Neither? (see post) Neither! Just harvesting 30 day gains at Fibonacci resistance, at the top of a trading range as a small rising wedge has taken shape of late.
Game Plan now…keep a close eye on XHB, with plans to repurchase it on a break of Fibonacci/channel resistance.
Bob-
Thanks for the heads up. I was looking at those calls today for a sale, but as you pointed out, the options pay nothing and offer superficial protection. However, I’m still much a bull at this point, especially after Friday’s run for the market. I thought we were about to stay within the trading range when we closed on Thursday, but the market has shown that was a buying opportunity. My fears are a USD short term reversal, so I shut down my silver trade (still long gold), but I don’t want to sell myself short because I think we’re headed to 1175. This light volume rally with people on Bloomberg in disbelief tells me that many people are underinvested, and have been chasing things like TLT, which I expect is breaking down or at best going sideways. If the best that TLT can do is go to $105 after QE2 is announced, then upside seems somewhat muted. Anyways, that’s my opinion. I’m not doing anything else of risk taking except watching the OIH/federal moratorium. RIG is already breaking out.
Thanks for sharing.
Only 5% bulls in the dollar right now!
Hey Chris… At the close, I received a strong sell signal for US indexes, a buy of the VIX, buy the USD… Today has the potential to be a major reversal date… Though I believe the timing is off, the technical signals are there, across the board.
William,
I tried the covered call strategy earlier this year and it was a real waste. To make any money, you either have to be very close to the current share price or go out several months. On XHB the OCT 16 has a bid of .31, and OCT 17 just .06, less than the cost of the trade for the retail investor.
I’d do the stop-loss.
Willam,
LOL…love the girlfriend comment.
You could put a tight stop on XHB and tell your girfriend you used protection! As I shared in the Bull/Bear/Neither post last Friday, I look at pieces by themselves.
I believe in “pattern harvesting” and will stick with what works. As I shared on the post, will buy it back on a breakout, ok with missing a small bit of upside as it proves itself.
shutin’ ‘er down already, say it ain’t so. At this point, I have to ask myself: do i pig-out and go the distance for a break above resistance? Hey Chris, won’t this rising tide in the market raise all ships (ahmm, XHB). I mean besides, it’s Monday and I have till the end of the week to report losses to my girlfriend on stock trades. I smell a covered call trade trade in the works.