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.