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End of year trade update

December 28, 2013

This is just a quick update to tidy up for the year.

The short position in Hormel Foods (HRL) v SPDR Consumer Staples (XLP) was stopped out at break even. As I have discussed on here many times, trades should be closed before earnings releases and the case for this is strengthened if there is an RSI divergence that suggests a reversion anyway.

Daily chart

HRLXLP

  • The stop loss had been moved to break even at A, on the first bullish daily RSI divergence
  • There was another bullish daily RSI divergence at B, the day before the results were released, two reasons to close the trade

Restaurants sector relative short trade

This was opened in mid December and makes modest progress.

Hess Corporation (HES) v SPDR Energy (XLE)

This trade is still in place, waiting for the longer term divergence to take effect

Owens Illinois v SPDR Materials (XLB)

This relative short sector trade was closed before results were announced on 30 October (blue arrow) and has since rallied, again showing the value of closing trades before results.

Owens Illinois v SPDR Materials (XLB)

OIXLB

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