Out of BUD (.17), BA (.27), and JPM (.43) to flatten out for the week. Back in a moment with the damage report.
Well, it was another good (and quick) week. AMZN was a closing debit of $270 for a gain of $793 (41% gain) BA closed at $270 for gain of $315 (17% gain) BUD closed at $510 for gain of $296 (15% gain) DAL was closed at $370 for a gain of $409 (20% gain) JPM closed for $1,238 for a loss of -$459 (22% loss) I'll go ahead and total this as though the hedge was a total loss, but I'm either going to close that position today, or use it to hedge additional positions for this week--I'll see after I look at the charts: Total gain: $460 (including $894 loss). If SPX sold for .75 now, that would be $1,047. At risk: $9,891 4.6% gain for the week or 10.6% gain if I dump the hedge now. Off to the charts to see if there's other good options for the week, or if I'm just going to close it out and sit out till Friday-ish. For reference, the original positions:
And back from the charts. This week looks a lot like the week ending June 9 (I remember this week quite well because I made a mistake--a profitable one--where I ended up getting out of the way of the tech correction just in time and even picked some of it up on my still open hedge for a monster week) , tech stocks at the top of their Bollinger Bands showing early bearish charts, sector rotation to consumer defensive. Nasdaq leading downwards and S&P following tacitly behind. Time to dig around the threads and see what the ES bears are saying (at least the ones I find credible on the subject).
So, time for me to sit out a week this week. I don't have a clear overall view on my market sentiment, and I feel like I'm just waiting for bad news to drop. Also, historically after two up weeks I don't do well on the third week. There's some psychological component to this I believe (confirmation bias and overconfidence would be the obvious ones). But couple that with a lack of entry signals (top of Bollingers and possible reversal signals on MA20s), combined with all time SPX highs, and lots of potential for political or global news fallout. It just doesn't feel right. Hopefully this is me learning my lessons and not sitting a profitable week. But I always do better after letting my mind clear of the previous week's charts and starting anew the following week. Anyway, I should (in hindsight) have close the SPX hedge when I had the chance. Would have been a 10% gain vs. 4% last week. But I'm not one to complain about picking up 4% in one week.
Today gave a nice jump in volatility and a great time to open 10/27 positions (and not to mention vindicate my decision to sit aside for this week). Positions are: AAPL - 10x 152.50-155 for .84 credit - $824 credit ($1,644 at risk) CSX - 25x 52-53 for .26 credit - $619 credit ($1,881 at risk) IBM - 10x 157.50-160 for .71 credit - $703 credit ($1,797 at risk) NKE - 25x 51-52 for .29 credit - $699 credit ($1,801 at risk) NVDA - 10x 192.50-195 for .85 credit - $834 credit ($1,666 at risk) SPX - 5x 2520-2535 for 1.20 debit - $611 at risk QQQ - 14x 145-147 for .36 debit - $524 at risk. Total Credits: $3,679 Total at risk: $9,924 Max Expected loss: $2,978 Target profit: $1,500
Out of IBM on the dead cat bounce today - 0.44 debit. This one looks to be headed lower. $248 profit for 13%
Just flattened out everything but the QQQ hedge on this one (I'll close tomorrow regardless of it's disposition). Back in a moment with the damage report.
Positions closed as follows 10x AAPL closed for .52 debit - $535 for profit of $289 or 17% 25x CSX closed for .15 debit - $406 for a profit of $213 or 11% 25x NKE closed for .18 debit - $481 for a profit of $218 or 12% 10x NVDA closed for .77 debit - $785 for a profit of $49 or 3% SPX hedges were closed for .75 credits - $365 or a loss of $246 or 40% As it stands the QQQ hedge is back to even (!) since I started this post (and I'm quite happy I got the previous post in given what's happened in the intervening minutes. If QQQ closed at even, the strategy will have worked up a $523 gain or 5% gain. Not bad for 3 days. We'll see what QQQ has in store for me tomorrow. And for quick reference:
I have a few musings I'd like to put here for posterity if nothing else. First off, I read IBM like a book (and I'm really pleased by this because I went against the opinion of another user here whom I well respect when he suggested it was a short--and not without considerable second guessing). And granted the ending of that book was obvious from just after 10:00 when the price pinged off 162.50 on heavy volume delivering a pretty clear double top reversal and I didn't pick up on it until just after 11:00. I did, however, have the good sense to hold for a bit more while we tracked back up to 161 and pretty much nailed the top of the dead cat bounce. So, I'm really pleased with that exit. I don't have an opinion on tomorrow's direction (I'd guess it's going to be slightly up and stagnate around 160 for the foreseeable future), and that's not a strong enough conviction to hold. Today, I was up across the board (and actually on every single position for a brief moment while I was flattening out). Initially I considered this an uncorrelated move (but a favorable one)--but in hindsight, I just happened to have a few positions that were lagging behind, or leading, in the case of AAPL, the pullback. I adopted a wait and see approach to this, but the writing was on the wall as my positions started following the QQQ and SPX down. I'll remember to be on the lookout for this in the future. I had considered flattening the account when I sold IBM, but opted against it. I probably could have taken another $100 or so, if only on not having to pay spreads to get out of the way of the falling market. I would like to give a shout-out to @sab1234. A new user who asked about what makes candles and why they're important. https://www.elitetrader.com/et/thre...stick-graph-that-makes-traders-use-it.314239/ While I didn't have a great answer, it did really get me thinking about what's important--and specifically why the open component of the candle is important. And this caused a lot of reflection for me personally, and it basically came down to, on its own, the opening price is unimportant to me. In the context of the prior and subsequent close however, its definitive. I guess I'd known this, but it took the question for me to think it through and really understand why instead of just that. Which brings us to the recently closed positions. This was fresh in my mind this morning when I was looking at the market. If Thursday was a gap down and rally back to flat (and that was no small reason for me selling volatility on that day specifically), today was the opposite of that--and hence my decision to flatten out. And finally, I have decided to get the ball rolling on a PHP-based tracker for my symbols and my positions. I got the tracks laid for the architecture on it, so it's just content in this going forward. The biggest thing I'm going to include in that is a place to get EVERYTHING I look at together--and specifically get the estimated earnings and ex-div dates on it. So, all in all, this has been a really good week. Typically, when I learn a lesson, it's the hard way, it's expensive, and it hurts. I think I had a pretty good lesson today--and ended up making money...and hence the fact I want to memorialize that here. I don't need to relearn this lesson the hard way if I forget it.