Popcorn or sine wave?

Argument can be made that when a pair reverts to mean it will eventually follow through to the other side leading to the other extreme. I've not been following that strategy though. The stock price moves resemble more of popcorn style moves.  Also if anyone has better ideas on a close out strategy would be greatly appreciated.  Couple of things happened in the last few days. One pair hit the 7-8% threshold (UMPQ/CBU), but we didn't close out at that time and now we are back to square one. The other pair overshot our estimate (MTN/MAR) and we ended up closing out too soon...

Long ADBE

Long ADBE at 27.84. Purely speculative. Rumors of MSFT take over.

In addition to the stock, bought 2 call at 31 with January 2011 expiration.

Expect a premium of at least 30-35% to the current price, given the way deals have gone through in this sector this year.

Short MAR

Sell Nov 37 Call at 0.85

Close Out (MTN/MAR)

MTN at 38.2,  MAR at 35.92

September Performance

The portfolio is up 1.3% for the month.Entire history since inception in table form is also here.

Month	Portfolio	S&P 500
Jul-09	1.7%	5.1%
Aug-09	4.0%	3.6%
Sep-09	4.7%	3.7%
Oct-09	7.0%	-1.9%
Nov-09	2.1%	6.0%
Dec-09	4.4%	1.9%
Jan-10	4.8%	-3.6%
Feb-10	-3.1%	3.1%
Mar-10	0.0%	6.0%
Apr-10	-1.0%	1.6%
May-10	-2.5%	-8.0%
Jun-10	3.9%	-5.2%
Jul-10	-0.3%	7.0%
Aug-10	1.3%	-4.5%
Sep-10	1.3%	8.9%

New Trade (Energy)

Long NAT at 26.76, Short ERF at 24.69

New Trade (Retail)

Long DKS at 28.12, Short ZUMZ at 21.33

Close Out (GDP Partial)

Close GDP at 14.26, Close the October short call at strike of 12.5 at 1.95 (Covered call trade). De-risking and not much theta lift at the current price.

Still keeping part of GDP/TLM pair open

New Trade (Industrial)

Long KDN at 33.72, Short WAB at 46.10

Close Out Call on EQR

Close out Call on EQR at 0.85. Bringing the portfolio closer to neutral.