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I am inclined to apologize for my persistent navel-gazing about my XLU trade, but it merits examination, and there are lessons to be learned.

I was curious when I discovered – – and I use the word “discovered” very deliberately since I’m exceptionally good at spotting patterns with my eyes/brain combo that computers simply cannot do – – the diamond pattern in the Utilities. It seems to me it took place way back on May 16, 2023.

I have marked with an arrow in the chart below when I declared the Utilities to be in a topping pattern (albeit not complete at the time). As you can see, although there were wiggles along the way, I pretty much nailed the intermediate-term top. An options trade based on this observation would have yielded hundreds of percent in profits.

Your humble in-house chartist did capture a pound or two of flesh, but I definitely left a mountain of money on the table. Why? Same old, same old: fear. Fear, fear, fear. That’s all it comes down to. Just plain old timidity.

On Thursday I watched my (former) position continue to roar higher in value. Judging from the soaring volume, people are finally catching on. It seems altogether likely my stomach will be in knots again on Friday if this thing keeps immolating. Sheesh. I can really suck it sometimes.

The only reprieve would be a hearty rally, but that’s no foregone conclusion! The ultimate bottom might not be had until we tag the multi-decade trendline, as we did during the Covid crash. If nothing else, even if today’s low was the low for the next five years, we can all agree this was a spectacular diamond pattern which paid off handsomely. I dread, however, that this glorious trade is not yet over.

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