A Bear Market Revenge 3-27-20

The past week was a long hoped and unexpected strong counter-trend rally. The majors recovered over 18%, except the small-cap was lagging at 15%. The market was very emotional. It played the typical of "buy on the rumor and sell on the news". The gap up on Tuesday was in anticipation of the $2 trillion rescue package. The 1000%, over 3 million unemployment claims on Thursday produced more than 4% gains while the passage of the 2 trillion dollar package produced more than 3% losses in the last 30 min before the market closing. I guess the market saw no more good news near term and was nervous over the weekend.

My net liq closed at 84K, upped 20K from last week due to the rally. The rally helped me to exit some of my long holdings, like HD, INTC, and IRAs. My main concerns are still on my long put options.

I will try to flip at least one long put in SPX and RUT next week. I will continue to exit my long term holdings to raise my cash levels. This downturn looks like a bad beginning rather than the end.

The Panic Continued 3-20-20

The market continued to panic as the COVID-19 virus spread around the world. The Fed lowered the interest rate to 0-0.25% and added $700 billion QE last Sunday, March 15. The index futures gapped down on the same evening despite the near 10% pop on the closing of prior Friday. Fed's stimulus package appeared no positive impact on the market. It might have provided liquidity to prevent total claps of the market. This week ended with another bear flag for all the majors. ES closed below 2018 low and below the 200 weekly MA. Friday was a big reversal day from positive to negative -5%. That's a bearish sign for the market next week. SPX looks like it's going to retest 2000 area which is the breakout area of 2016. RUT is closed at 1014, near its 2016 low of 943. The majors lost another 13% for the week.

My net liq stayed at 64K after selling 200 shares of QCOM for 13K, similar to last week. It's a bad situation. I am not allowed to add any positions except hedging or closing positions. I had to close 3 deep ITM RUT long put and roll 2 more. It cost over 100K cash. These long puts will continue to drain my cash. I don't have enough time to wait out this selloff.

I will have to calculate my current spread distance of the long puts to see how much they will cost me maximumly. My cash is not enough to cover all of the positions. I will have to sell most of my stocks whenever there is a pop. The problem is that my stocks have lost more than 30% of their values as well which reduced my net liq value as well.

A Big Crash 3-14-20

It was the biggest weekly drop since 1987. The bear flag patterns in the majors played out with a big gap down on Sunday night. The COVID-19 virus and OPEC failed to reach an oil production agreement were the two major factors. Every day of the week was more than 4% movement up or down. There were 8% of moves on Thursday and Friday. Luckily the last move of the 8% was an upward thrust in the last 30 minutes before Friday's closing. Overall the high VIX was never seen after the 2008 financial crises. It was heart ranching.

My net liq was below 100K for most of the week. I took a risk of borrowing another 20K from ET to rescue my long puts for the week. I rolled three of my four positions far out in time. I wanted to flip my last SPX 3430 LP but didn't get enough time before the closing. My NL dropped below 100K as the market dropped again on overnight and most of the Friday. I finally was able to flip it on Friday under pressure and paid 2K for it.

My borrowing power is almost depleted in both of my IB accounts. I will have to cut my losses under the worst conditions, as VIX is still above 50 and my longs are at maximum losses. But I have to do it in case the situation even gets worse. A zero balance is better than a negative balance. I plan to take a 100-200K loss in cash first.

The Volatility Surges 3-6-20

It was a very volatile week for the market. The price ranges were more than 3% daily. VIX is hanging above 30 even on the up days. VIX reached 54.39 on Friday, the highest level of the last 10 years. Although the majors recovered about half of the losses in the last 30 minutes of the session VIX is still closed at 42. The bear flag pattern is present in the daily charts of the majors. Also, they closed below last week's opens. Those are the bearish signs. On the other hand, they are technically oversold on the daily charts.

My portfolio was under $100K most of the days last week which limited my ability to move my positions around. The leverage is elevated above 8. Short calls were reduced by 2. The pressure is on the long puts but I limited ability to reverse the puts to calls.

I may be forced to close some of my long puts positions next week if the market continues to push lower which is likely. My personal account is faced liquidation by Monday. I spent $900 to roll it to Monday in the long put. I will have to stop loss at 30K or more on Monday. It's sad I didn't hold my rules of not trading the account. It dragged for over a year. I switched from long to short, then short to long last week. 

A Disastrous Breakdown! 2-28-20

The majors gapped down about 2% on Sunday night following a -1+% down last Friday. There were 3 of -3% days during the week. All of the bulls were disappeared. By Friday, The majors are in correction territory of -10% or more. Surprisingly how the market sentiment has changed from bullish to bearish. During the week, During the week buyers couldn't lift the market at all. It was panic selling all over the places. It's possible to see a 15-20% correction if not getting into a bear market.

My portfolio suffered a big loss for the week. Despite adding 20K to IB account borrowed from ET my net liq still ended way below 100K. It closed at 87K by the end of the week. I don't even have much room to borrow more funds. The 35K I returned to ET was brought back again. The leverage is at the highest level of 11.35.

I am very depressed and my hands are tied up now. I don't have much room to adjust or reverse my positions. I had to close one SPX and one RUT long put to reduce stop losses for about $52K on Friday. In my personal account, I was forced to close the short call of 2820C and roll out the long of 3220 which was pushed deep ITM in the fall of this week. I had to take a 7.9K loss instead of a 25K loss. The account could face liquidation soon if the market continues to fall.