Equity market has been turning down for the week. I sensed it later last week but didn't have full conviction of it. I bought indices ETF puts then bought calls on a up day. I got wipe sawed on both side for lack of plan and flexibility to go with market. Indices had the worst week to the down side in 2014 according to CNBC. It didn't feel like it. I thought that last Nov's pull back was more severe. I waited to put in bull puts later last week. I entered some naked SPY bull puts earlier this week in Etrade. It turned out to be too early. Then I was fooled by Thursday's up push only to face a later afternoon sell off. Market seems in panicking mode with crude oil falling off cliff and below $60 now. I underestimated the down turn again this time.
I need to look at bigger pictures and use daily closing as my confirmation for short term trend. I still have a day trader's mentality paying to much attention for every swings of hourly charts. Starting next week, I will have to use daily and weekly charts, along with Fib, B bang and MACDs for my analysis.
USDA WASDE Report of this month didn't produce any large swings in grain market. The three major crops turned up at end of the week. I followed my plan of not increasing my positions in grains. I managed to lock in my profit positions, mostly in bull puts. However, most of my bear calls are under pressures now. It appears that I am going to get hit on the bear side after the hits of bull side last summer. I am considering to completely get out of bear calls. Should I step aside and wait? I will look at the total losses and come up with a plan this weekend. My available margin are low too.
My plan for next week:
1. Take stops in my indices. Then wait for further downward thrust to take recovery positions. I already missed a exit of ES bull put based on my plan. I must overcome the psychological pain of taking stops in order to be successful in trading.
2. Rise some margin, cash to shore off my positions in case we have much further pull back. Transfer some equity positions into my IB account if I have to.
3. Stay patient and be disciplined. Wait for daily closing as my confirmation of trend changes. No panic or rush, just follow my plan and rules.
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