It was a quiet month on the trading front. No new positions were opened, and existing positions were maintained without the need for any adjustments.
Whilst our monthly net return of -10.92% doesn't look too good on paper, this figure alone doesn't tell the whole picture. No positions were threatened or closed for a loss. In fact, this negative return will likely be reversed in December as we head into options expiry on the 21st.
We are still comfortably OTM (Out Of The Money), and from here on, two things are going in our favour.
- Time decay (theta).
- The current bullish sentiment seems worn out and ready to retreat.
As of today, and after Friday's large move north, there is only a 21% probability of our positions getting into trouble.
The S&P 500, and in fact most indexes have rallied to new highs in late November as optimism has risen to levels not seen in 26 years. There's a strong potential for a significant selloff which we are patiently waiting to profit from.
The U.S. Dollar Index is finding strong support with the trend remaining higher, which will place added pressure on equities.