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.
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.
This week has mostly been about managing existing positions via rolling the diagonal spreads in Walmart (WMT), Akamai (AKAM), and Airbnb (ABNB) to bring in income and reduce cost basis.
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.