By: Steve Smith
The U.S. is heading into a long 4th of July weekend, while it simultaneously marks the end of 2021’s first half. And if I must say so myself: Boy, does time fly! Nonetheless, It’s a good moment to assess where we are in the Options360 service and where we think the market’s going.
For the most part, the song remains the same; namely bullish. The two main forces of a strong economic recovery and an accommodative Federal Reserve are providing investors with the confidence to keep pushing stocks higher.
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As far as Options360’s performance, it’s also steady as she goes. After a small rough patch in April and May — where we incurred a 6% drawdown — we’ve righted the ship and are currently up 21% for the year-to-date. It’s not a lights-out performance, but it is outperforming the S&P 500 (SPY) by 50% (the S&P 500 is up 14% YTD). More importantly, it’s delivered 39% to 122% member PROFITS EVERY, SINGLE YEAR since I started it in 2015!
However, I’ll be completely honest with you: Even as the major indices march steadily higher, it’s been a rather tricky market for me to trade. This is due to the underlying rotation which seems to swing back and forth between sectors on a near-daily basis. Also, I don’t get involved in meme stocks, which have helped some people garner huge profits.
Rather, I’ve been sticking to my knitting by trading large-cap liquid names and using spreads to define my risk and reward.
We also closed out a bullish position in Sketchers (SKX) for a 42% gain over the 3-week holding period.
Part of my reason for reducing my overall exposure is that earnings season’s just around the corner and I want to ensure I’m not inadvertently taking on that event risk. I’ll be making specific earnings trades in the Earnings360 Service. However, that’s a more speculative approach than I take in the Options360 Service where it’s all about grinding out steady and consistent gains over time.
Let’s hope the second half of 2021 continues on that path.