Wednesday, January 02, 2008


Dr. Brett had an recent post noting all the 2007 DOW gains could have been made by simply buying Tuesday's close and selling Wednesday's close. That system doesn't show the same stellar results with the Qs, but it corresponds with my research marking Wednesday as the best performing 3 day pivot high sell day. In today's case, unfortunately, the system only worked if you bought puts Tuesday and sold today. . . but the holiday, FOMC and other economic reports and light volume coming into the day should have been clues to stay away from this Tuesday/Wednesday anyway. I managed to gird my loins coming off 13:00 and went long the near calls. I was looking for a retracement up to S2 (at least) and when the Qs stalled at 14:15 I decided to just take the money and run . . . I'm glad I did. We closed somewhere down in the S5 region and my RSI(2) daily system triggered at 15:45, so I'm now long the near calls and short the near puts. I'm going to keep tight stops on those trades as the Qs may continue down to the 49.15 area if overall weakness prevails and my strategy would be to close those current positions, rather than add to.

No comments: