The majors reached new highs on Wednesday. Then it started to a selloff in Thursday morning session without any notable news. Technically speaking, SPX hit the Fib 23.6% target from the early January's low. But it stayed above the Fib target for several days. I thought it could have one more leg to reach the Fib 50% target at the 3410-20 area. SPX gave back about 1.7% for the last two days while NQ falls more than 3%. RUT gave back around 1.5%. The dip buyers got knocked on their heads pretty bad today. Both MACD and RSI are turning downward but MACDs haven't had any red bars on daily. This may be a normal technical pullback which matches the majors' seasonality. Early March could be a deeper pullback in SPX seasonally.
My net liq stay at 118K about the same level in Feb. The Leverage and options values are still elevated at 5.4 and -431K respectively. The situation hasn't improved much. The downturn could present more danger if the selloff persists to more than 5%.
The key tasks are survival and downsize. I need to review my plan for 2020 this weekend. I haven't reduced a single ITM position as my plan required for 2020.
Friday, February 21, 2020
Saturday, February 8, 2020
A Trick Track Market 2-8-2020
The majors started the week reversing the downward trend of last week. I was worried about a further sell-off last Sunday night. The rebound was very strong. SPX and RUT made continuous three-day gap ups. By Thursday, SPX made a new ATH of 3348 which was a 120 points move in four days. RUT made an 85 points move for the same period and retest the breakdown area of two weeks ago. Then it came to a small selloff on Friday. The majors were falling down after a better than expected NFP report ( 224K vs 154K expected). ES and RTY closed down -0.67 and 1.4% respectively. It was a really tricky movement for the week. The MACD is turning up in the daily while turning down in the weekly chart. But there are no crossing on either. It's hard to tell the market direction right now. The 20-year seasonals are showing a choppy to slightly downside movement.
My portfolios are pressured further by the week's reversal since I had to reverse a long put to a short call during the selloff a week ago. My net liq is 110Ks, barely above the board line. The leverage is also around 5.5. It's too high above my target of below 4. The delta is balanced but won't be able to stand a more than 1% move up or down.
I have come to realize that I need to aggressively reduce my options sizes. Since I had more long puts during the first part of January's surge. I was able to pill off more long puts. But the selloff on January 24th locked an extra long put in each asset. The wild movements of the last two weeks weakened my net liq. I have to hold the net liq lines and reduce margins by reducing sizes right now. I may look for other ways to recover the losses late. The key is to survive first.
Greatness comes from the ability to get out of bad trades!
My portfolios are pressured further by the week's reversal since I had to reverse a long put to a short call during the selloff a week ago. My net liq is 110Ks, barely above the board line. The leverage is also around 5.5. It's too high above my target of below 4. The delta is balanced but won't be able to stand a more than 1% move up or down.
I have come to realize that I need to aggressively reduce my options sizes. Since I had more long puts during the first part of January's surge. I was able to pill off more long puts. But the selloff on January 24th locked an extra long put in each asset. The wild movements of the last two weeks weakened my net liq. I have to hold the net liq lines and reduce margins by reducing sizes right now. I may look for other ways to recover the losses late. The key is to survive first.
Greatness comes from the ability to get out of bad trades!
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