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.
Saturday, August 24, 2019
Monday, August 19, 2019
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.
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.
Saturday, August 10, 2019
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.
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.
Sunday, August 4, 2019
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.
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.
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