XLI Immediate Exit

I literally just opened these contracts two days ago.

I exited XLI immediately because XLI performed atrociously on March 5, 2026. Not only did it open below the resistance, but it also dropped below the support throughout the day and it barely closed above the $172 support. See below for the performance:

My initial contract was for $2.40 on March 4, 2026 (yesterday) I set a stop loss of 25% so once the contract reached $1.97, I was going to sell. Unfortunately, I went below this stop loss as I exited during my working hours. Selling price was $1.17

So even though XLI did close just 2 cents above the support, it didn't convince me that I wasn't going to continue to lose more. It wasn't a smart move to stay in. Not only that, it also reached $170.21 today, I would've lost over 95% of my capital invested.

I'm not entirely upset about this, I did feel like I entered at a pull-back moment after seeing that $179 high on March 2, 2025. I am certainly glad that I fought my urge to "see what happens" and staying in. So let's actually take a look at what took place and why the abrupt drop today.

• The Department Homeland Security (DHS) – Its shutdown continues for a third week, this has a direct impact in the Aerospace sector of XLI. In addition to this, later today, the announcement of the removal of Kristi Noem as head of DHS
• The spike in oil prices – This can be a good thing for XLE, but ultimately it leads to higher prices for XLI as higher oil prices may cause industrial projects to rise.
• Geo-political tensions with Iran – This in general is affecting most sectors, but trading routes are now being interrupted, creating pressures around the entire XLI sector.

So there is a lot happening, today's slump was shocking to say the least. I don't entirely believe my entry was that bad, I do acknowledge that I didn't take into consideration how the DHS and geo-political tensions could have an impact into the XLI sector. It is something I am learning post exit. I've mentioned it in the past, I'm not one to follow news, but through learning the stock market, I've learned that I need to be aware of the news. Primarily because it is affecting my investments – I don't like anything to negatively affect my money, I don't think anyone does.

I'm curious to see how "seasoned" traders took today's performance, I wonder if they saw it coming. Either way, I am glad I was able to not lose my entire capital for options, and now it opens another opportunity for my next one. In the next run, I will definitely consider external factors before jumping in. Of course, there might always be something coming from the left field, but a stop loss is what will keep me longer in this game. I haven't automated a stop loss order, but it is something I will look into implementing on my next one. Not a bad trade, just more learning.