The Pullback Before The Election 11-2-2024

 I missed two weeks of my weekly reviews although I thought it was only one week. I was stressed and disappointed with my performance during the two weeks. I was worried about how I survive the deep drawdown. The margin limits in both accounts restrained my ability to adjust my DITM positions when SPX held above 5820. The major indices finally broke down this week. SPX lost the 20 DMA support and closed above the 50 DMA support. It lost 1.5% this week and booked the second consecutive losing week. The uncertainty of this election finally kicked into the market sentiment. The election result could last days or weeks before it is settled. 

IBQ Netliq is up 19% from 88468 to 99452. The realized P/L is -17201. The collected cash is $4285. The options' value went down 1% from 509K to 496K. I made a big mistake by closing Nov 1 5475 SC for $41.4K on Oct 14. I couldn't reenter the position because of the margin limit. I was totally stressed out and tired that night. It was a devastating blow for me. The delta is down from -149 to -50 with the market pullback. The leverage is down 13.5% from 789 to 683. It's still dangerously elevated. VIX is above 20 into the election week. The total positions are C6-1 and P7+0. I made 42 trades that cost $150 in commissions this week. I didn't add any 1-1-2 trade due to the election uncertainty. I didn't have much gains in directional trades. 

IBQ had another big losing month in October. The realized P/L is -52600 rolling out these DITM SCs. The collected cash is -$38,136 including the error close of SC 5475 for $41K, +-$8.5K stop loss. It was a disastrous month.   

IBP got some relief from the pullback this week. The netliq is up 10K from 133K to 144K. SMA is up slightly from 7.8K to 9.4K. It's from the narrowing of the SC spread and collected cash. They could disappear again if SPX rallies again. There are 5 SCs and 4 SPs currently. I couldn't exit any SP due to the pullback. The cash collected is $1039. The realized P/L is $9447. Both cash and P/L offset some losses from previous weeks. I traded 2 put lottos with 3x returns. I still have strong FOL emotions in directional trades. 

IBP lost -$14,121 in realized P/L in October. The cash collection is -$9,203. I had to pay cash to roll the 5 SCs daily for most of the month. The call spreads are stretched. 

Lessons and Plans:

1. Enforcing stop losses is still an issue for me. I have to have stop-loss orders ready in IBQ before the market pullback. IBP has an SMA limitation. 

2. My stop-loss rules are A. Take 3X losses if the premiums are less than $1000; 

                                        B. Take 2.5X losses if the premiums are between $1000 to $1800;

                                        C. Take 2X losses if the premiums are above $1800.   

3. Recognize my big drawdowns accurse when the trend changes and I don't have stop-loss orders in place. 

4. Spend more time on how to hedge the election volatility. It's going to be a big week with the election on Thursday and FOMC on Wednesday.  Sometimes doing less is better than doing more when the emotions are high.  

      

Break To New High Again 10-11-24

 SPX broke out to the upside after the 12-day rangebound below 5800. PPI and the banks' earnings triggered the breakout to 5815 late last week. YM also closed another ATH above 43100. Will NQ and RUT follow the suit? The 40+ years of election seasonality have yet played out this year. It could be in a reversed order: buying the rumor and selling on the news. 

IBQ Netliq is down 7% from 99K to 92K for the week. It had 2 days above 100K before the breakout. The realized P/L is $14690 as I closed and rolled in several SPs. The collected cash is -$1431. I had to buy back a SP for $4K to avoid a red warning one night. I later realized I could have rolled an SP to a near DTE to void the red sign. The SPX long calls and MES made some profits this week. The options' value went up with the rally from -537K to -545K.  The delta went up 12% from -410 to -466. The leverage is up from 740 to 815. These measurements are elevated to the dangerous level again. VIX stayed above 20 as the rally continued. VIX usually would be below 15 when the new highs were made. Does it mean something? We will see how it plays out. The total positions are C7-11 and P5-2 with the In and Out offset. There were 49 trades for the week. The commission cost is $185. I didn't add 1-1-2 trade due to the CPI, and PPI events. 

IBP SC spreads positions are stretched to the limits. I didn't know that SMA played a critical role in limiting the spread expansion. I couldn't roll the SCS more than 1 day out which cost me dearly. There are 5 SCs and 4 SPs into next week. I left one SP available in case I need more adjustments on Monday.  The realized P/L is $-20309. The cash collected is -5197. I had to sell 24 HD and 16 QQQ for $17758 to shore off the SMA liquidation warnings in the last 3 days of the week. I may have to put some fresh money in early next week. This situation really stresses me out. 

1. I didn't add Stop-loss orders to every new position this week. I realized it would cause the SMA balance to go into negative in the IBP account. I have to figure out a different way to make stop-losses. 

2 I am still working on dealing with my fear of losing. I don't like the feeling of losing subconsciously. Losing is part of trading. It's like the phoenix flying out from the ashes. 

3. My stop-loss rules are A. Take 3X losses if the premiums are less than $1000; 

                                        B. Take 2.5X losses if the premiums are between $1000 to $1800;

                                        C. Take 2X losses if the premiums are above $1800. 

        The stop-loss is the rule but there are considerations for Delta, Netliq, and the total positions.    

4. The IBP account is limited to spread expansion. I need to figure out the numbers or percentage of the balance tolerance. I may put free money into the account instead of selling stocks. Because selling stocks doesn't give a full cushion for SMA.    

5. I continue to work on the sense of accountability and self-discipline. It's a long process of changing my old habits at the subconscious level.                

A Week Of Rangebound 10-5-24

 The majors were in rangebound holding the uptrend for the week. SPX traded between the 5678 and 5672 range. The pullbacks were bought and rallies were sold until Friday's NFP. The NFP was a big surprise to the upside, with 254K vs 150K expected. Down made a closing new high while SPX was only 16 points from an ATH. Tech and small caps are in ranges. The major news events are FOMC Minutes, CPI, and PPI. The major indices are bullish despite the seasonality. I shall pursue this with caution. 

IBQ Netliq is up 11% from 90.3K to 99K with the rangebound week. The realized P/L is -28829 as I had to roll out a couple of DITM SCs. The collected cash is $1967. The SPX long calls and MES barely broke even this week. The options' value is flat from -542K to -537K.  The delta went up 7% from -308 to -410. The leverage is down from 822 to 740. It's still elevated. VIX is up from 19.3 to 20.4. The total positions are C8+1 and P7+0 with the In and Out offset. There were 56 trades for the week. The commission cost is $206. I added one 1-1-2 with one that expired at the end of September.  

The IBP situation is worsening as I had to expand the spreads on the SC side. The rally relieved the SP side but pushed the SC DITM. I exited 2 more SPs but had to add 3 more due to SMA warning. I couldn't roll the SCS more than 1 day out which cost me dearly. There are 5 SCs and 6 SPs into next week.  The realized P/L is $11428. The cash collected is -4313. I had to pay to roll the 5 SCs daily without expanding the spreads too wide. This is like 1000 small cuts in bleeding. 

Lessons and Plans:

1. I didn't add Stop-loss orders to every new position this week. I realized it would cause the SMA balance to go into negative in the IBP account. I have to figure out a different way to make stop-losses. 

2 I am still working on dealing with my fear of losing. I don't like the feeling of losing subconsciously. Losing is part of trading. It's like the phoenix flying out from the ashes. 

3. My stop-loss rules are A. Take 3X losses if the premiums are less than $1000; 

                                        B. Take 2.5X losses if the premiums are between $1000 to $1800;

                                        C. Take 2X losses if the premiums are above $1800. 

        The stop-loss is the rule but there are considerations for Delta, Netliq, and the total positions.    

4. The IBP account is limited to spread expansion if the rally continues. I need to figure out the numbers or percentage of the balance tolerance.    

5. I continue to work on the sense of accountability and self-discipline. It's a long process of changing my old habits at the subconscious level. 

6. I shall stay calm and focus on recognizing, and controlling my emotions. I am under a great deal of stress with the current account situation. 

Holding At The Top 9-27-24

 SPX and Dow made new highs while NQ and RTY struggled. The Bulls look like a bit tired. SPX couldn't close above 5750 with China's big stimulus package and better PCE data. The SPX's MACD turned red on 2nd day but RSI is still above 86.  The market may reset after the 3-quarter ending on Monday. VIX bounced at 50 DMA. Oct is a seasonally volatile month. I will remain open-minded. 

IBQ Netliq is flat at 90K. The realized P/L is -5097. The collected cash is $1849. The SPX long calls and MEX didn't work out this week. The opening pattern has changed from open drive to open pullback. The options' value increased by 4K from -537K to -542K. The delta went up 7% from -213 to -308. The leverage is up from 813 to 822. It's still very elevated. VIX is up from 16.1 to 19.3. The total positions are C7-0 and P6-1.  I must keep them at the current or lower levels. There were 56 trades for the week. The commission cost is $186. I didn't add any 1-1-2 due to the margin limit. 

The IBP situation is worsening. The rally relieved the SP side but pushed the SC DITM. I exited 2 more SPs but had to add 3 more due to SMA warning. I couldn't roll the SCS more than 2 days out. There are 5 SCs and 5 SPs into next week. Any bigger size move could further damage the netliq and B/P. I may have to take a stop-loss in the SP positions. The realized P/L is -$1789. The cash collected is -3322. I had to pay to roll the SCs without expanding the spreads too wide.

1. I made progress in adding Stop-loss orders to every new position. Luckily none of them were tested this week except the MES. MES tends to get stopped in the middle of the day. I am still working on dealing with my fear of losing. I don't like the feeling of losing subconsciously. Losing is part of trading. It's like the phoenix flying out from the ashes. 

2. My stop-loss rules are A. Take 3X losses if the premiums are less than $1000; 

                                        B. Take 2.5X losses if the premiums are between $1000 to $1800;

                                        C. Take 2X losses if the premiums are above $1800.    

2. I realized the IBP doesn't have much room to expand if the rally continues. I need to figure out the numbers or percentage of the balance tolerance.    

3. I continue to work on the sense of accountability and self-discipline. It's a long process of changing my old habits at the subconscious level. 

4. I shall stay calm and focus on my emotions during the market hours.

    

Another ATH Since July 9-22-24

SPX and YM made new ATHs after FOMC's 0.5pts rate cut. Techs and small caps were legging behind. The 0.5 pts cut surprised the experts who expected a 0.25 pts reduction. The futures market staged a strong rally the night after the announcement. SPX gapped up over 5700 and ended the day up 95 pts, +1.7%. It closed the week holding above 5700. Next week is critical to see if the Bulls can keep it running. 

IBQ Netliq is down from 102K to 90.3K, -13%. It falls below the 100K mark again. The realized P/L is $48561 with a couple of SPs closed. The collected cash is -$2589. I bought a Dec 6000 call for $4.2K to hedge the uptrend. I closed the NVDA long for 250% gains the day before FOMC. The SPX long calls paid off on FOMC day. The rest of the longs didn't work out well. The options' value increased by 12K, 2.5% from -525K to -537K. The delta went down from -362 to -213. The leverage is up from 673 to 810. VIX is down from 16.8 to 16.1. The total positions are C7-2 and P7-2. I need to keep them at the current levels. There were 82 trades in the monthly Opex. Some of the trades went back to July of this year. The commission cost is $316. I didn't add any 1-1-2 due to the FOMC, and low netliqs this week. There is still 1 SC deep ITM. 

IBP is in a similar situation. The rally relieved the SP side but pushed the SC DITM. I was able to exit 2 more SPs after closing the old ones. There are 5 SCs and 4 SPs into next week. The realized P/L is -$21693. The cash collected is -2609. I had to pay to roll the SCs. The cost of failing to take stops early on. 

Lessons and Plan:

1. I made progress in adding Stop-loss orders to every new position. Luckily none of them were tested this week. I shall release them instead of waiting for the alerts next week. I am sure the stop-loss will happen when the market condition changes. I am still working on dealing with my fear of losing. I don't like the feeling of losing subconsciously. Losing is part of trading. 

2. I continue to work on the sense of accountability and self-discipline. It's a long process of changing my old habits at the subconscious level. 

3. I shall stay calm and focus on my emotions during the market hours.  

        

The Week Of Reversal Before FOMC 9-14-24

 SPX started going up on Monday after last week's selloff below 100 DMA. It went up in five consecutive days. It was a dramatic reversal of 150 points swings from down 1% to up 1% on Wednesday. It's above 100, 50, and 20 DMAs now. The ATH booked in July is less than 50 points away. It may reach a new high or smackdown during the FOMC week. It will be a volatile week as the Fed is expected to cut the interest rate for the first time in 3 years.     

IBQ Netliq is up 19.7K from 82.3K to 102K, +19.3%. The realized P/L is -3773, a narrowed loss. The collected cash is -$2356. I had to buy many hedges to keep the red warning off. I took losses or missed the winners in the directional trades.  The options' value decreased by 9K from -534K to -525K. The delta went down from +236 to -362. The leverage is down from 868 to 673. VIX is down from 21 to 16.8. The total positions are C9 -0 and P9 -0. There were 67 trades with many hedge buyings. The commission cost is $237. IB increased the commission by 1-2 cents per contract this week. I didn't add any 1-1-2 this week. There is still 1 SC ITM. 

IBP is in a similar situation. The rally relieved the SP side but pushed the SC DITM. I was able to exit 3 SPs on Friday. I had room to add 1 SP for next Tuesday. The realized P/L is $23773. The cash collected is $452. The total positions are C5 +0 and P3 -2.  I am still in the survival mode.

Lessons and Plan:

1. I made stop-loss orders for my positions. But I pulled them out at the last minute during the big reversal on Wednesday. I reversed up twice. I still failed to take the stop. It's hard to change the bad habit. I made progress in setting up the stop-loss orders. I have been working on dealing with my fear of losing. I don't like the feeling of losing subconsciously. Losing is part of trading.

2. I didn't follow the rule of -1+1 strictly. I was overconfident the side couldn't be breached. It actually blew through several resistant levels on Wednesday. I ended up adding 2 SCs. They cause over $17K under water now. 

3. I shall stay calm and less active during the big news events.  

   

A Selloff To Start September 9-8-24

 A big -119 pts, 2.1% selloff on Monday, 9-3 after SPX's 56pts, 1% rally to near ATH at the end of August. The pop and drop trapped both bulls and bears. I was one of them. SPX closed down more than 150 pts, 4+% this week. It cut through 50 DMA and right at 100 DMA. The seasonality didn't play out so far. 

IBQ Netliq suffered -10K, 10.7%, from 92K to 82K for the Labor Day shortened week. It gave back all the gains from last week. The realized P/L is -37605. A huge blow from the 4% selloff. The collected cash is $1295+$1673 interest. Most of my directional trades didn't work out either by the reversal or closed too early. The options' value increased by 4K from -534K to -538K. The delta went up from -245 to +236. The leverage is up from 786 to 868. VIX is up from 15 to 21. The total positions are C9 +1 and P9 +1. The added SP cost the thinner margin. There were 31 trades for the 4-day week. The commission cost is $129. The margin and delta didn't allow any addition of 1-1-2 trade. I was able to exit three of the 4 ITM SCs during the selloff.    

IBP is in a similar situation. The selloff pushed the SPs DITM. The realized P/L is $31212 for the week with some rolls for next week. The cash collected is $1750+980 interest. I traded Infra's calls but didn't make much profit. I will continue to try. The NVDA ER IC paid off on the short side. The total positions are C5 +0 and P5 +2. The SP is hurting now. There is no SC exit insight either. 

Lessons and Plan:

1. I made stop-loss orders for my positions. But I failed to release them on Monday based on my bias, not the rules. I have been working on dealing with my fear of losing. I don't like the feeling of losing subconsciously. Losing is part of trading. It has become clear during my meditations that the underlying cause of my failure is the fear of losing. I fear of stop-losses. I fear losing before entering a directional trade. It's a subconscious behavior.  

2. I am reflecting on what has gone wrong in my trading for the last 10 months. The things I could control are the position sizes and stop losses. I couldn't be successful without either of them.  

3. Follow the rule of -1+1 strictly. 

5. Recognize my emotions. Fear and overconfidence are both dangers. Let the urges flow through. 

6. Be objective. My bias about the market direction often affects my decisions. Be flexible and watch the S/R levels hourly and daily.