Fed & The Trade Deal 12-13-19

The majors moved higher this week. Things are more clear after the Fed held the rate and been supportive of the market. The trade deal between China and the US took the last worry out of the market. The majors broke out to the upside. SPX booked two more new highs. It's on the way to 3180-3200 targets. RUT pushed higher to 1655 and held above 1630 support line. The Christmas rally continues. It appears the major obstacles are removed and the sky is clear. Could there be a sell on the news play again? It's possible but not likely. Wall Street doesn't want to spoil the party and mess up their fat bonus checks. 

My portfolios are squeezed again by the trade deal news. My deltas were balanced by Wednesday. The trade deal breakout on Thursday threw everything out of balance. Net liq is back above 130K. Leverage is elevated at 437. I had 3 long puts closed out today while adding one SPX back to it. 

I am examing my thought process of why I didn't turn my deltas to the positive side after FOMC in Oct. I guess my approach to the market has been fear-based. Yes, it's true the market goes up like riding a escalate and comes down like an elevator. But I need to follow the trend. Be proactive. 

It's A Bull Market! 12-6-19

The week started with a pullback following the Black Friday's downturn. Both SPX and RUT hit their supporting trend lines and bounced. The uptrend is intact. The up and down moves were driven by trade talk news. The bull pulled up the market awaiting today's NFP numbers. The NFP was staler of 266K v.s. 185K expected. The majors broke out to the upside for about 1%. Noticed that the big majors closed slightly below or at the broken-down areas of Monday. Except for RUT which made a 52wk new high and closed right at last week's high. It's a bullish pasture. Like Jessie Livermore said, It's a bull market!

My net liq gave back the gains from earlier this week. It's back to 12.8K. The leverage is elevated to 4.5. With today's breakout, I was forced to adjust everyone's portfolios to avoid large delta inbalance. The lesson here is that delta should be adjusted aggressively early in a trend change. The market tend to go extream in either direction. The early adjustment will give more room to run rather than been forced to change in the later stage of the trend. Of course, there is always a chance to get it wrong. Be ready to accept it using the 80/20 rule.

A Strong Nov Closing 11-30

The majors made new highs even the day before Thanks Giving. RUT is still above 1620 on the small pullback of the HK bill signed last Friday. The bulls pushed the Nov gains best since last June. The SPX's December target is at 3180-3200 if there are no major interruptions, such as the trade war deal delays.

My net liq suffered again for the week. It's closed 127K. My Delta adjustment was not aggressive enough. The leverage is near 4.6. It's at the threatening level now.

My stress level is high now while Betty's net liq is at 110K, the lowest level ever. I have to do whatever I can to prevent a possible liquidation.

A lesson learned last time seems not applicable to the current situation. I stick to my rule of not adding positions unless one is off this time. It turned out hurting our portfolios so far. I need to update my playbook on making adjustments early on when a turn is in its early stage.  I shouldn't be afraid of an early mistake in betting on the turn. It's better than being forced to make changes in the later stage.

Range-bound At Highs 11-22-19

The majors finally pulled back a little for this weak. But they are still hanging on the upper ranges. SPX refused to go under 3100. Dip buyers kept the market on holiday rally. MACDs are crossing down on daily. But the weeklies are still strong. RSIs are not terribly overbought. The market may be waiting for the trade trounce. There could be a blow-off top with the news. The old saying: buy on the rumor and sell on the new. 

Net liq stayed above 140K for this week. The leverage is slightly below 4. The portfolios are stable for the week, except for the SPX 2810 SC in my personal account. It's stretched to the 30K limit. I had to wire another 5K in to rescue it. But how long can it last? I was able to close out two SPX LP and two RUT LP. I rolled out an SPX 3110P and a RUT 1610P. I will be glad to see the majors pull back some next week.

I need to review my current rolling strategy and practice. I basically didn't make much progress for my clients' accounts this year. For my main account, I paid back 38K to ET and covered my monthly spendings. It's not going to fully recover for another year or two if I continue to practice the same way. 

The Bulls Are Not Tired 11-15-19

The bulls are not tired at all. the sentiment is so bullish when bad news couldn't knot the market down for more than 1 hr. Then, any good news could rally the market for days. I often underestimate the extreme levels the bulls and bears could push to. I didn't act in a far sight view to aggressively adjust my portfolios. Of course my new rules of "Not adding positions" didn't work for current one-sided price actions.

Net liq is down to 142K.  The leverage is above 4 after several long calls are off the book and the majors broke out to the upside. I am heavy in short calls now. My clients' portfolios are in similar conditions.

I didn't spend time to trade ETFs this week. I thought the longs are too high and the shorts are not low enough yet. So, I was right on the shorts but missed the longs.

The Bulls Carry On 11-8-19

The majors booked another week of gains. SPX closed at 3097. RUT is also close to 1600, the big round number. The year-end rally is marching on. I have been waiting for a pullback but it hasn't happened. My contrarian thinking often became wishful thinking. It seems a habit now. I need to base my thinking on the current facts.

I was able to exit SPX 3070 LP and RUT 1565, 1575. But my total positions remain the same except I reversed a RUT short call to long put. Deltas are very negative. Only a 1-2% pullback could help balance it.

Net liq is back above 140K. The leverage is above 4. I prefer it stays in mid 3. My ETFs are all shorts. My view of the direction is not in line with the market and I haven't been flexible to adapt to the market. I failed to take stop losses of my IWM put entered before the trade agreement. I let it stayed there until it expired worthless today. It is a $250 total loss. Until I can take losses or reverse positions quickly to preserve my capital I won't make it in my ETF trade either.

All Time Highs - Partying On 11-1-19

The majors continued their uptrend this week. SPX stayed in the new high territory above 3025 after the breakout on Monday. NQ is in a similar pattern. DJ is less than 100 points from its ATH. RUT is the only one far from its ATH of 1742. But it is ready to break its July high of 1600. Fed cut the rate for the 3rd time this yr. GDP is near 2% and the NFP for Oct is better than expected. Manufacturing is in contraction 3 months in a row but nobody cares. The market usually will go through its cycle and get to a target unless there is a major disruption.

My portfolios are squeezed by the surge of this week. Net liq is at 143K. The leverage is above 4. I was able to exit 7 long puts on the month-end and the weekly expiry. Although most of them are add-ons. I think there is one major in SPX and RUT at least.

I have adjusted my deltas less actively this week. My thinking is not to chasing the breakout and new highs often bring in selloffs based on past experiences. I failed to stop losses on my IWM bear puts placed before the trade talk. I didn't actively manage it rath relied on hope. Hope is not a strategy. My directional ETFs are still too passive in the bear side. I need to be more nipple. Follow my plan.

S&P Is Near All Time High Again 10-25-19

The majors have been grinding up for this week with some batter than expected earnings reports. Bulls are buying every dip. All three majors are only 0.5-2% away from their all-time highs except the small-cap RUT. I am puzzled why they didn't take out the highs before FOMC next Wednesday. Are they waiting for the FOMC to determine the next move, up or down?

Net liq stayed above 150K. The leverage is at 360. The slow grinding upmarket is less threatening than the continued falling market. I am glad that I was able to exit out 5 long puts which give me rooms to roll up my short calls when the pullbacks come.

My rule of not adding more positions is working so far. The net liq seems to stabilize. I haven't needed to add more hedges on the expiration dates for the last couple of weeks. Could it be because of the low vol environment?  Many of my ETF directional positions have not worked since they are mostly bear positions. I need to be able to flip my market views and act quickly.

The Majors Turned Up On Trade Talk & Fed REPO 10-18-19

I missed writing my journal last week due to my daughters back home.  The majors actually turned up late last week on the progress of US-China trade talks. Fed also announced to inject funds to banks or it's a type of QE 4. The majors explored the daily value area from the top to bottom in both SPX and RUT. FIB levels could be used for references too.

Net liq closed above 150K after I sent 5K back to ET. The leverage is at 3.6 mainly due to the rangebound market. The overall market is still bullish. SPX is challenging 3K again. Earnings reports are better than expected so far. I want to adjust my portfolios to the positive side.

The approach of controlling the number of positions is having a positive impact so far. It should reduce leverages as the size reduced. It may take longer to unwind the portfolio since I don't add leverages to the opposite side. I don't have a full understanding of the approach yet. May have to experience a couple of volatile periods to see how it works. In the meantime, my ETF trades have worked well so far. It will take more time and practice to get it right.

Break Down On 1st Of Oct 10-5-19

Like the last couple of months, the majors made a big move on the first of the month. September was an upturn while August and October started a downturn. The majors fall about 3% in two days with weaker than expected economic data. The ISM manufacture and service indexes both were lower than expected. The NFP on Friday was about 10K less than expected but the majors bounced up 1% following Thursday's bottom buying tails. The market is anticipating another Fed rate cut soon.

I was still somewhat emotionally reacted to the two-day selloff early in the week and didn't anticipate the quick bounce in the last two days of the week. The key mistake I made was that I broke my rules by adding a position to my PSX long put on Monday. I was hoping or gambling. Although I did have a position exited before adding this 2950P. I knew I shouldn't add the same strike back. The key to my account recovery is to reduce the number of positions. Stay disciplined is still my biggest weakness. The majors are forming a wadge in daily. It should break out one way or another on trade talk and Fed.

Net liq is below 150K but recovered from earlier losses. The leverage is at 378. I have been spinning the wheels in the mud for most of the year. The 35K paid back is about 1/3 of the 100K borrowed. I need to put in my outside box new strategies soon. I have been trying the ETF add-on on small scales. It won't help the portfolio much with the sizes. I will continue to work on my "Rules of Reducing Leverages".

A Week Of Down Turn 9-27-19

The majors are under pressure. On top of the trade war uncertainty, the impeachment inquiry added more pressure to the market. Any related news and rumors could move the market up and down. MACD is pointing more downside movement.

I wasn't quick enough to add more ETF positions to the downside. I had thoughts to buy downside hedges but no clear plan. I need to map out my "when and then" plan in the morning and execute it without much emotion and "what if" hesitation. I will edit my "Rules of Leverage Reduction" to make it more practical and clear over the weekend.

Net liq is close to 150K after taking out 2500 for my regular and additional withdraws. The leverage is at 370, slightly better than last week. I was able to reduce two small RUT and one SPX puts. But add one SPX put back with my old, bad habit of risk high for a small gain. I made my first swap between RUT call and SPX put. It's workable despite a bad timing early this week. SPX may be easier to exit in percentage terms, but not in margin requirement.

A Week of Surge 9-13-19

The majors followed through from last week's upswings. SPX is back into the 3000 territories and almost made another ATH. RUT gained 5% in the week. It's the most advanced in the majors. There is a clear change in buying preference. The small caps and values are in favor now. The FANG is not leading this time. What's the implication for my trading?  Is RUT going to catch up and break out the box this time?

My portfolio is hit hard by the surge of RUT and SPX. The delta was pushed deep into negative areas. I had to add more long puts attempting to left delta up. I need to remember the lessons of last May and August. Try not to be too aggressive and get caught in a sudden turn. Next week's FOMC is a major event I need to stay clear off. The market sentiment and wave are more important.

Net liq is barely above 130K. I was able to pay another 5K back to ET early this week. Leverage is back above 4. I am still thinking about and searching for better ways to unwind our positions.

Has The Majors Turned? 9-6-19

The majors turned positive in the first week of September. The pattern is so far similar to the price movement of May and June of this year. SPX is less than 2% from the all-time high. As usual, the small caps are legging. RTY has just moved into its VA low while ES closed at the high of its VA. The market is in a tricky position now. Will the bad reputation of September play out again?

My net liq is back above 150K again. I couldn't adjust my delta quick enough when the SPX turned on Wednesday. Leverage is at 3.6 which is much better than above 4 last week. I am breathing easier this week.

I have been watching my position size closely. In principle that I won't add a new position unless there is an old position expired. I will use the weekend to calculate my theory of switching RUT to SPX. How much would it impact the margin and funds for such switches? I really need to think outside of the box now. Otherwise, there is no hope of getting out of the bad satiation.

On The Edge 8-23-19

The majors closed this week down again on a violent Friday. It is the fourth down week base on the futures prices. The trade war is escalating on Trump's irrational behaves. Bond rates are near or at inversion which causes the fear of recession.  SPX and RUT lost 2.6 and 3% today respectively. They are closed at the lows of their current ranges. We may see a breaking down next week or a retest of the bottom.

I am holding on my new rules of restricting position sizes. I have been slapped on my face during the major surges and retraces because of the added positions. I allow adding a position when one position is off. I need to do more study and thinking about this new approach.

Net liq is down to 132K again. I was hoping to send back another 5K but the big drop today made it not feasible. Leverage is up to 434. I may have to reverse more positions early next week.

Another Volatile Week 8-16-19

The market went through another volatile week but ended recovering more than 2/3 of the losses. The majors booked another -3% day on Wednesday. It was the 2nd time in August. The major driving force was the bond rate inverting, although it was only briefly. The market is worried about this recession predictor. So far the majors held in their current balance ranges. It's a news and event-driven market now. The sentiment is still leaning to the bearishness.

My net liq recovered some and closed above 131K. Margin is at 430. It's about the same as last week. The excess liquidity is low as the VIX stays elevated.

I am trying to reduce the size of my positions. It requires a different approach. Otherwise, I will continue to stuck in the mud.

Wild Swing 8-9-19

The market experienced a wild swing this week. It started with the biggest one day drop (-3%) of 2019 on Monday. It was triggered by the Chinese currency devaluing to above 7.  The market feared if the trade war spread into a currency war. Then, it poped the next day following an overnight reversal in the index futures. The majors recovered most of the losses by Friday.

My portfolios were hit pretty hard on Monday since they were vulnerable from last week's retrace already. I had to reverse positions to add deltas and net liq. I realized this could cause problems when the market holds or quickly recovers. That is the cause of my previous failed recovers. I need to figure out a better way to void these vicious cycles.

Net liq fall to 13.2K. It was better than Monday's 11.5K. I thought I had to borrow funds again. I hope I don't have to unless the low of Tuesday breaks. VIX could still go up quickly if any bad news pops up. The trade war appears prolonging.

The Big Reversal 8-2-19

The major event of the week was that the Fed cut the interest rate for the first time in a decade. It was supposedly a very positive signal for the market although the decision was partially pressured by political force. But the Fed chairman's less dovish comments about the decision disappointed the market. The street has a bunch of crying babies. The market sold off on that day. Then, the recovery rally on the next day was interrupted by the additional 10% tariffs to China announcement. That announcement during the market session spooked the market and reversed. It followed with another day of selling on Friday. It appeared that the recent record highs were the tops. The correction is in progress. How deep the correction could be is anybody's guess. So far the market is still in the uptrend. SPX held its 50 DMA and RUT is still above its 200 DMA. But the RSI is not in oversold condition yet.

I was over-optimistic before the FOMC announcement. I knew it was risky after the new highs. I was hoping to quickly unload some of my long puts on the FOMC event so I could reduce my longs. I rolled up some of my lower strikes. They worked only to the July 26 week. The correct way should be to reduce risk before any major event. I was still too emotional. I forgot that hope is not a strategy.

My net liq is down to 140K after another 5K to ET. It suffered about 8K in the week. Leverage is up to 4. Delta is too high on the positive side. August could be a dangers month, like 2015. I need to be proactive and quick.     

Another leg Up - New Highs 7-26-2019

Bulls are back in charge after last week's retrace. It was a wild week. SPX was knocked down on retesting of the double top at 3020. It gapped up and made a new all-time high 3026 today. It ended the week at ATH. RUT followed a similar path of SPX. It's about to challenge the 1600 mark.  AMZN had a disappointing earnings report yesterday. My exit target is way off.

My net liq stayed at 150K range. I have not collected many premiums this month so far. Luckily, all of our long puts were closed out today which gives more rooms to roll up bear calls. Leverage is at 3.7.

My search for new trading strategies didn't make much progress. My fear of losing is still the roadblock. I need to choose a service provider and develop my own system on top of the service. 

Topped Out? 7-19-19

The majors closed in negative territory this week. SPX fell below the 3000 marks. RUT is still the weakest. It appears the tops are in. The market may be retracing before the FOMC at the end of the month. It also could be the beginning of the summer pullback.

My portfolio is stable with the delta in ranges. I couldn't exit any positions due to the pullback. I am a little too heavy on the long put sides which worked during the runup from early June. I had a short IWM put didn't work out. I think this wave of the upswing is over unless the Fed surprises the market again. Earnings season is muted so far.

Net liq is still around 150K after I returned another 5K to E-Trade. Leverage is at 370s. I think the slow uptrend provide me a stable portfolio.

My new strategy search is stalled after disappointing C-2 and Stockhoot results. I am back to consider trading ETF or stocks. The key is to overcome my fear of losing. I need to build a clear and calm mindset. Back to the research again.

The Three Majors At ATHs 7-13-19

I can't believe that I missed two weekly reviews before and after the July 4th holiday.
The three majors (ES, YM, and NQ) are holding at ATHs at the end of this week. Only the small cap (RUT) is still 10% from its ATH. It's turning up on the weekly chart. Overall, the breakout of the majors may have legs supported by the Fed's dovish position.

I am still using the same rolling up strategy with shorter expiries and aggressive long puts. It's working so far as long as the trend doesn't change. Monitoring our positions sizes and deltas are the key. It won't work once a deep pullback comes, such as the 10% pullback of this May. I haven't found a good way to hedge more than 5% pullback.

Net liq is above 150K which is better than June's average. It's partially due to the rais of my stock holdings. Leverage is at 3.7 and the option value is below -400K. It appears it's easier to manage the portfolio with a slowly rising tide.

I have made some progress in search of a new addon trading system. The keys are time frames and margin requirement. I have to overcome the fear of loss as my major shortcoming.

S&P Making New ATH Again 6-21-19

The Fed is in play again. The expected dovish statement boosted the market. SPX made a fresh new high the day after the FOMC announcement. It was a triple top. Maybe the third time is a charm. If the high is held then we may see SPX reaching 3000. While NQ and YM are not too far from making new highs, RUT is still far away from its ATH of 1746. The G-20 is another big event at the end of next week. The direction of the trade war is another market mover after the FOMC.

I was able to reduce the numbers of our positions in long puts as the market is holding up. I had too many long positions from aggressively rolling the short calls. It's hard to catch the rapidly moving market. SPX is up 7% this month so far and up 17% for the year.

My net liq is almost back to 140K after paying back another 5K to ET. The leverage is back above 40 which I need to watch it closely. The Options value is also above -400K. That is a key figure I need to reduce.

I haven't made much progress in selecting a new program. I should work on it over this weekend. I need to define my objectives and criteria clearly. 

A Turn Around Week 6-7-19

The majors started to turn around when June began. All it took was that Fed members provided dovish comments. The majors were boosted expecting rate cuts soon. Fed is powerful but often played by Wall Street. The Street is a crying baby and the Fed act like a baby sitter. SPX and NQ made a bullish engulfing on weekly. RUT recovered the lost ground of last week. The bulls are back now. There is likely more upside movement near term.

I started to adjust my portfolios early in the week. Using delta has helped me to prevent my holdings totally out of balance.  That's a lesson I learned a hard way. Although my hands are tight with available. I realized that I had added too many bear call positions during the slide in May. That is a dilemma I often face. I seem to not have many choices when the market is volatile. Try hard to find more ways to improve my practices.

Net liq held above 140K. Options value is below -400K and the leverage are in high 3s.

  

The Water Fall Week 5-31-19

It was a short week with the Memorial Day long weekend. The selloff accelerated as the trade tensions expanded into Mexico. The Sell in May carried to the end of May. The selling process has been methodically measured. There may be another push down to make the market panic. Otherwise, we won't see the bottom forming. 

I have been trying to reverse my positions based on the deltas of each portfolio. I didn't do it quick enough. So the net liq has reduced. I need to add more forward thinking and prediction to my rolling actions. I was too conservative earlier this week. The selling may continue for another week or two. RUT has given back almost 10% from its April high while SPX is about 7% lower from this year's high.

Net liq is at 138K which is about 10K lower than the end of last week. Leverage is back above 4 now. I need to act ahead of the curve to prevent any big damages in case there is another waterfall near term.

The Selling Continues 5-24-19

The selling pressure continues into the third week. The majors retested last week's lows and formed a bear flag pattern. RUT broke the low of last week and closed below it. The weekly MACDs are about to make a bearish crossing while the daily did it a while back. The trade tension is the main factor making the majors nervous.  Some people are talking about a correction of 10% or more.

Our portfolios are pressured further from the 1.2-2% drop on the long side. Luckily the most of long puts were closed out today. There are 2 RUT 1520 and 2 SPX 2830 ATM were rolled down. The majors are forming an HS pattern now. It may play out if the trade war is not eased soon. The deltas are weighing on the put side now.

Net liq is back up to 144K after transferred another 5K back to ET. Options value are at -390K. Anything below -400K is a relief for me. Leverage is at 384. The Memorial Day long weekend will give me a chance to think and learn new approaches to unwind my deep ITM positions.

Sell In May 5-17-19

I was in Fort Laudel late last week for a short family vacation. I didn't write my weekly journal last week. S&P started falling back after making an ATH in late April. RUT is in the same pattern of a pullback without making ATH.  The trade tension is putting pressures on the market. The MACD daily is showing some signs of oversold but the weekly just started crossing to the downside.

It was the 2nd down week led by RUT. After the 2-3% selloff on Monday, the majors held in range. It looks like March's pattern so far. It could turn out to be last Oct's selloff after earnings ending. I was able to exit most of our long puts last and this week which reduced some risk to the downside. I may roll up more short calls if the majors stay in range next week.

Net liq is at 145K after I paid 5K back to ET. Leverage is below 4 for the first time in a long time. The value of my options is at -401K. Hope I can get it below 400K.

An Eventful Week 5-3-19

There were FOMC and NFP this week alone with ER in full swings. The majors sold off after the FOMC's news conference. I can't believe that many people expected the FED to lower the interest rate. The NFP job report today was much better than estimated (263K v.s. 190K). SPX recovered the loss of Wed and made another ATH. RUT gained almost 2% and closed above 1600 for the first time this yr. Bulls are strong. Many people are fearful of missing out.

My portfolio recovered about 6K this week. I was heavy in long puts. Five out of six of my long puts were exited and one was rolled to next Monday. That gives me more room to add long puts next week. The price of it was that my short calls are further under water now. I have to work with what's present now.

Net liq is at 128K, slightly lower than last week. I didn't collect premiums after spending on hedges. Leverage is at 473. The progress is very slow. The two RUT 1100 short calls are 30% under water. There is no way to release them under my current method. I may have to use a different asset to replace them.

Bulls Are Holding Up 4-26-19

The majors got boosted from positive earnings. So far, more than 70% of the S&P components reported positive surprises. The 3.2% of the 1st Q's GDP reported today was better than expected. SPX and QQQ made ATHs on daily closing. The bulls are holding up despite several selling attempts during this week.

My net liq improved largely due to the 20+% surge on QCOM which reached an agreement with Intel on patent disputes. I continued to roll up my positions based on the delta. I tried to be more aggressive whenever the margin allows. I still can't keep pace with the rising market.

Net liq is above 130K which provided some relief. I moved 5K back to ET to reduce the margin interests. Leverage is still elevated at 4.8. I will try to use calendar and ratio spreads to hedge the puts.

A Week Of Range-bound 4-18-19

This is a shortened week due to the market closing on Easter Friday. SPX closed flat from last week with a buying tail. Sellers could press it down, unlike RUT. It closed down about 1.5% for the week. MACD is showing weakness on daily. The current runup may be over or need some retreat. The earnings session is positive overall but hasn't produced much excitement. Something is going to break one way or another.

My results are mixed for this week. I was able to exit all of my SPX long puts since it didn't move much. When RUT failed to close above 1590 I had to roll out my 1590 and 1565 long puts to next week. I still have a couple of RUT long puts around 1600 for the next 2 weeks. RUT may be falling out of its current balance area which will give relief to my short calls but add pressure on my long put. I may test to see if I can switch positions between SPX and RUT. I have too many positions in RUT.

Net Liq is closed above 130K. It increased about 10K this week, mostly from QCOM's near 20% pop on its agreement with Apple. Net option values didn't change much. Leverage is near 4.6. I should be more creative and aggressively to reduce my leverages while the market is calm. It will be tough to get more funds when the next storm comes.

Q-1 Earning Season Started 4-12-19

Fed's dovish stands are confirmed once again from the release of the Fed minutes on Wednesday. JPM and WFC started big banks' earnings reports today. Both banks beat the estimates of the street. The majors responded positively. SPX broke above 2900. It's only about 2% from the ATH of last Oct. RHT is approaching 1600. It's the weakest of the majors. NQ is leading the pack and near the ATH now. Are we going to see a new high or a double top? I guess it's depending on the econ data and earnings reports. Technically there may be a good chance for sellers to step in on the first attempt to a new high.

My portfolio is stable for the week. I continued to add long puts based on the delta and margin. It's hard to keep the delta neutral as the majors kept going up.  With today's breakout, most of my long puts were out profitably. But the shorts are deeper in the water. Why shouldn't I keep a bullish view and make delta positive? Fear of sudden drop?

The net liq is above 115K. Leverage is still above 5. I have survived but no real improvement. I need to be more aggressively adapt to the market direction. It's what you think that dictate your action.

Breakout To The Upside 4-5-19

The market continued to move up this week with the positive development of the trade talks. Today's NFP report is better than expected (196K vs. 175K expected). The majors moved up.  SPX only added about 0.5% while small caps led the indices for 1%. Strangely the Dow didn't participate today's rally and closed flat. I noticed that the majors are at the top of their value area highs. Of course, they can go up much higher.

I tried to add more long puts to take advantages of the uptrend. The result is that I wasn't aggressive enough. I guess the fear of a sudden drop is influencing my trade selections. Other factors are the margin requirement and low volatility that hard to get orders filled.

Net Liq dropped 6K from last week. It ended at 11.2K today. It's in the result of my negative delta. Leverage is up to an alarming level of 5.4. It is safe to keep it below 5. We may get some relief next week hopefully. I may have to do a risk reversal next week which I should have done it earlier this week.

Range Bound Week 3-29-19

The majors stayed in a new range after the selloff last Friday. They didn't go lower as I expected. S&P actually recovered most of the loss after breaking out recent high today. The rate inversion didn't scare the market. The new round of the trade talk boosted people's hope. The Fed is backing the bulls.

The range bound market helped my portfolio. I was able to exit out five of my long puts and reversed an SPX short call to long put. The Clients' long puts of the week were exited out as well. The majors are expected to break out their current ranges soon. It's likely to the upside if the trade talk produces a positive result.

Net liq improved slightly to 120K before the 1.5K auto transfer to BOA. Leverage is still hanging around 5. Delta is on the negative side of it. Options value at -428K. I will be able to add a couple of long puts next week after today's exits. But I have to be strict about increasing side on rolling positions. I still don't have a good solution to drastically deleverage my portfolio.

The Fed Confused The Market 3-22-19

The Fed FOMC announced that it would not raise the rate in 2019. The decision surprised many market participants. Most people thought the Fed would leave the rate hike option open for 2019 since the Fed was emphasizing on data dependent. The majors run up then sold off after the announcement. It was a typical ABC price movement. On Thursday the majors broke out to the upside on the Fed's dovish stance. They felt that the Fed is on their back. The bulls were cheering for the clear sky in 2019. Today the German and US PMI were both below their expectations. The market reversed direction to the downside. The selloff accelerated after European closing. SPX and RUT closed down 1.9 and 3.6% respectively. They were the biggest one day loses in 2019.  RUT has been weaker than the other majors from the January rally. Is this the beginning of the 2nd shoe drop?

I had several long puts expected to be exited safely based on the breakout yesterday. I had to roll and reverse them on today's selloff. The new daily lows were made at closing. I made my adjustment based on Delta and the margin constraints.

Net liq was reduced to 110K. Leverage is back to 540. The danger is present and clear. I will work out a plan over this weekend.

The Bulls Are Back Again 3-15-19

The long buying tail of last Friday played out this week. The majors reversed up on Monday and completely recovered from the losses of last week or even more except RUT. The bulls are back in charge now. SPX closed at 2822, a new high of 2019. Based on today's breakout, SPX has a target of 2880-2910 range. RUT is relatively weak after being faded out today. It could be pulled up by the others next week though. The daily MACD is turning up. Its resistance is at 1568-1578 range. The big event for next week is FOMC on Wednesday. The dovish Fed is the power behind this rally, I think.

I didn't reverse my positions from short call to long put earlier this week. My hesitation made my portfolio under pressure again. Luckily I was able to close each of my long put in SPX and RUT. My delta is ended negatively today. I will have to make some adjustments early next week, especially on RUT. 

Net liq stayed in the same range of 110K. Leverage is still above 5.2. The improvement is much smaller than the price movement. The fate of my portfolio is at messy of the market. I don't like this kind of stress. My search for solutions of unwinding my positions has not resulted in anything. I didn't work hard enough. I am invited to do a presentation in options with a local Wechat group this Saturday.   

The Tide Has Turned 3-8-19

The majors formed a bearish engulfing candle on Monday. The tide changed to the downside. This is the first down week of the majors in 2019. Today's NFP was 20K vs 180K expected. It was a big disappointment. The sentiment has changed to somewhat cautious. However, the majors didn't drop much during the early session. They even staged a recover before closing. Not sure if this pullback is so shallow.

I acted fairly early to reverse our long puts based on Delta. It's an improvement from these reactive actions earlier this year. Today's reversal didn't work out well. I thought the poor NFP number could cause a big selloff but it didn't happen. Late I guessed the reason may be that the bad NFP could make Fed stop rate hikes. Either way, I need to be more factor based.

Net liq is about the same level of 115K. Leverage is above 5. Only the quick risk reversal saved me from this selloff. I still don't have a workable plan to quickly deleverage my portfolio except taking big losses. 

The Restless Bull 3-1-19

The majors closed slightly lower this week. But the dip buyers are present. They formed a long buying tail on the weekly bars. Today's closing at top of the day is bullish too. RUT/IWM closed above its 200 MA today at last. All majors are above their 200 MA now. This may be the rarely happened V bottom. The 2nd shoe may not drop down for a while.

I finally made the long due to RUT risk versal today. It should have been done last week or early this week so I could have void another 10K wire. I was overly concerned about my low N.L. Who hesitated get hit.

Net liq is at 113K after another 10K wire from the sales of my IRA. Am I drained into a black hole like many other gamblers? Where do I draw a final line? I don't see any near term relief for my deep ITM positions on both sides. Would I be able to sustain another 5+% shock in either direction?

Hanging On A Thread 2-22-19

The bulls kept charging up on this unprecedented recovery. The majors closed up for the 9th week despite all of the overbought indications. I don't know how to explain the situation but admit the fact.

Had to wire another 10K from selling my IRA holdings. My net liq is only $500 above the water line again. I am in a hard and rock place since I don't have enough margin to reverse my positions.

I will have to wire in a bigger amount of funds by selling more IRA. The dilemma is no immediate hope to get my deep ITM positions out. 

Unstoppable Bulls 2-15-18

The majors closed their 8th week of gains. It's incredibly strong. Technical indicators are in extremely overbought conditions. Of course, the market can stay in extreme territories than I can stand. I think the dovish Fed is the main force behind it. The US-China trade talk progress provides sentiment catalyst. SPX and RUT are close to 2800 and 1600 respectively.  SPX is firmly closed above its 200 MA.

My portfolio took more damage this week. Net liq dropped below 100K on Tuesday hit by a 1% pop. I had to wire in 10K from selling my IRA holdings to cover it. It was all gone by today with another 1+% pop. My delta is totally out of balance. I was hesitated to reverse my short calls when I had enough net liq. The constraint was the available funds. It's the dilemma I constantly facing.

Net liq is closed at 95K. Leverage is at 6.4, close to the day before Christmas on the sell side. I have to find another 10K next week to shore off my account. I am incurring taxes when taking IRA fund out and paying 10% interest to borrow these fund. It's a loss/loss situation. What's the best way for me to get out of this hard and rock place?     

Is The Bull Exhausted? 2-8-19

The majors break even with a few points up on today's closing. I thought yesterday's selloff was a turning point. Then, today's drop and pop seem to show that bulls are still strong. The downtrend lines were broken for the majors and they are trying to hold the gains. The dovish stance of the Fed may have changed the market fundamentally.

I barely survived another week, perhaps due to the smaller market movement. I still don't have a new strategy to get myself out of this hole. Any aggressive approach requires more buying power. I may have to get a large amount (30-50K) from my IRAs since I have used up my regular accounts.

The N.L is only a few thousand above the watermark. Leverage is above 5 for the week. The delta is negative to the downside after I made an RR in SPX. Luckily I rolled my RUT bull put on the same side today. I altered my plan today. I was going to make my adjustments after 2pm. The selloff in the morning session spooked me. I didn't think the majors could stage a full recovery which rarely happened on a near 1% selling day. I was concerned that I may not have enough time to roll the 11 ITM positions across all accounts.

Closing Up Again 2-1-19

FOMC and NFP late this week boosted market confidence and powered another break out for the market. The majors closed up in the sixth consecutive week. It may be a new record for the last 10 yrs at least. There was hardly any pullback days during January. The much-anticipated retest lows have not happened. I am still waiting for the 2nd shoe to drop.

My portfolio was pressured further by the bulls. I had to wire in another 6K to shore off my net liq after hanging on a shred for 2 weeks. The hole is digging into my IRA accounts now. Do I continue to defend my portfolios with borrowed funds or face the consequence of liquidation?

Net liq is around 105K. I used to have 150K as my lower limit, then 130K, 120K ... Leverage is above 50 now. Another sudden and big drop in the market could hit me from the other end too. I have been monitoring the number of my positions on both sides. I am using Delta to keep the balance and try not to add more positions when I can.

Is This Time Different? 1-25-19

The majors booked their fifth positive week. The much-expected sellers and retest of the recent lows have no signs of it. This Tuesday's 1-1.5% drop was fully recovered by Friday with a strong trending up day. It's an overbought market technically speaking. Of course, the market can stay in extreme condition for a long time. Earnings season may have provided some support for the bulls. FOMC of next Wednesday could be a catalyst for the market.

My holdings are pressured further on the long side this week. I wasn't aggressive enough in adjusting my delta. I thought Tuesday's pullback was the beginning of the selloff. But there was no follow through. I have noticed that adjustment often came at the late cycle. I tend to be more reactive than proactive.   

My net liq is below 100K again on this Friday. It recovered on Tuesday's selloff after the MLK long weekend. I made a couple adjustments but my delta stayed below -100 throughout the week. Options value got pushed above -400K with an increased number of positions. I will have to wire my last batch funds in on Monday if the majors go up again. I need to be more aggressive in adjusting my positions without increasing the total count. I am going to look for other methods to survive.

The Raging Bull 1-18-19

The bulls kept pushing up mainly on the China trade talk news. Despite some earnings disappointment, the majors booked another week of gains. SPX passed its 50% retracement while RUT is approaching it. The majors are in overbought conditions based on RSI and MACD. They could continue to push to extremes just like the oversold conditions last December. The retest of the recent lows may be delayed.

I tried to adjust our holdings based on the deltas. But didn't get any pullback for the last 4 days. I only reversed one RUT from the bear call to bull put and some split rollovers. Deltas are still slightly in negative readings. I wasn't aggressive enough although previous experiences taught me differently.

My net liq closed below 100K at 98700 during the 1% pop on Friday. I should have reversed one more position from bear call to bull put last Thursday despite the 1% pop. I tend to guess or hope the next move of the market is in my favor. This unrealistic tendency has cost me dearly. I am starting to think the two opposite possibilities and form my plans accordingly.

The Revenge Rally Continues 1-11-19

It was a week of revenge rally.  The SPX and RUT booked five consecutive up days. The majors parked near the December break down areas. A typical retest point. Sellers are likely to step in. VIX and its futures are below 20 now. Would there be another VIX surge?

My portfolio is pressured on the bear side. I kept waiting for a pullback to adjust my bear call positions but didn't get any meaningful one. It has happened to me during the previous rallies. I had to step in to split rollout some bear calls to reduce my negative delta since my net liq reached the warning line in the last two days. I made delta adjustments for my clients as well. We are still slightly delta negative since I believe another leg of selling will come. It's likely to retest the lows of last December. Hope it will hold there. A V shape bottom is possible but not likely given the slowing economic growth and trade tensions. The earnings session has come with many warnings so far.

Net liq is down to 108K. Leverage is at 513. It's my average at low 400s. My net ITM positions increased for RUT and 3 for SPX due to rollings. I have to monitor the size very closely. 

Recovery In 1st Week Of 2019 1-4-19

The majors closed up sharply this week. SPX and RUT are up 4% and 5% respectively with over 3% pop today. Both of them reached their Fib 38.2% retracement from ATH. The recovery may still have room to go up to the 50% RT. It was still wild price actions. Daily movements of 1-3% were normal with VIX between 30-22.

My trades were mainly reacting to the market movement. I have been tracking my options positions and their delta daily. Try to keep them balanced. Hedging the positions is still very costly.

My portfolios are somewhat stabilized. Net liq is 117K. The margin ratio is barely above 30%. The leverage is below 5. There was only one RUT put off the list. The short calls are under pressure with recent recovery. My focus should continue on limit positions and reduce risk.