A Pause 4-24-20

The majors took a pause this week. They all booked an inside week. SPX had its first losing week after four positive weeks. RUT is the weakest one but had a small gain this week. The jobless claims were 4.4 million, less than last week's 5+ million. The bad news is good news now. I guess there are some charities now. Earnings continue to be bad. Many companies won't provide guidance for the rest of the year. The next 2 quarters could be worse for businesses. The majors refuse to go down imply the upside may not be over yet. MACDs are turning lower but RSIs are around 50s, not showing overbought conditions. 

My net liq is at 88K. The leverage is still around 7. I couldn't do much of trading this week since the net liq is below the limit. The amount of the fund I spent to roll and hedge make it hard to recover. I listed the reasons in my review last week.

I started to trade leveraged ETFs this week. I bought some bearish index and VIX ETFs on Wednesday when the majors were fulling back 2-3%. I thought it was the start of the downturn after 3 weeks of bounce. I was wrong again. I will take my stops next week once my limits are reached. I need to work through this weakest link in my trading. 

The Rally Continues 4-17-20

The Majors continued rallying this week except for the small caps in the choppy range. The virus spreading or just the fears appear slowing down. The economy is not getting any better though. The jobless claims reached 5.3 million this week. SPX rallied almost 4% this week. It's parked right at its 50 SMA after today's 2.7% rally. After passing Fib 50%, the next target could be the 62% RT for SPX. RUT is the weaker one. It only hit its Fib of 38.2%.

My net liq closed at 93K. There is no position for this week after I reversed my SPX 2640SC to June 18 2950LP yesterday. This was a timely right move. The leverage is at 67. I am still in a hard and rock place.

My hedge of ES puts ended with a total near $5K loss. I am still bad at stop losses. This is my deadly bad habit. I kept hoping for a sudden drop. I totally ignored the price action in front of me. If I had stopped the loss and didn't flip the SPX 3250 to short call for $6.8K my net liq would have got back to 100K level now.

A Big Surge 4-9-20

The majors surged more than 10% in this shortened week after last week's pullback. The possible topping of the COVID-19 could have boosted the sentiment. The surge could be more technical patterns playing out, such as Fib and ABC. The 6.6 million unemployment claim was offset by FED's another $2.2 trillion programs. So far this surge could be still a bear rally. But it's impressive of a 20% bounce from the March lows.

My net liq is above 90K. A nice 1.2K recovery. The leverage is at 6.45. I was pretty bearish at the end of last week when SPX tried to break the 20 MA twice and failed. I was still single-minded expecting a breakdown. I placed ES puts in mid of last week. I committed over $5K and being greedy of doubling my money. I failed to prepare in case of the market against my thesis. My bad habit of not taking hard stops causes me the most of my puts. Hope is not a strategy.  Also, I had to roll my SPX 2640C to next week which caused me another $2600 without reducing any point yesterday. The two bad trades prevented my N.L to back to 100K.

I will continue to reduce my stocks if the market recovers more nest week. The majors retraced 50% so far. We may see a stall or a leg down soon. I will try to reverse a long put to a short call in RUT to balance my long and short.

Bulls Couldn't Hold 4-3-20

The majors retraced from last week's run. The bad news was overwhelming. The virus spread rapidly in the world. The economy in the US is hurting badly. Over 10 million people filed unemployment in the last two weeks. The market reacted to the bad news and horrible employment numbers better than I expected. SPX and RUT gave back 7% and 11% respectively. The bulls couldn't take the majors to cross the 20 DMA. VIX is below 50 for the first time in the last 4 weeks. It's still a bear market.

My net liq is above 80K. The leverage is at 10. My hands are still tied. Couldn't reverse any long put during the up days. I didn't have any position to expire this week. I only shortened one SPX short call from 4-24 to 4-9. I hesitated to flip my long put when the majors challenging 20 DMA.

I will try to reverse one long position from SPX and RUT. I have more RUT long puts than the short calls. I also have an SPX long put with 110K exposure. That must be reduced! My assumption is the bear market is not bottomed. There may be another leg down if the virus is not contained quickly. Plus, it will take a long while for the economy to recover. The question is not if there is a session, but how bad it will be because the virus is unpredictable.