The Monday reversal after last Friday's ATH in SPX and YM caught me and many others by surprise. The big money took the market to new highs after the poor unemployment and new job reports last Thursday and Friday. I thought the unusual surge might have delayed the expected pullback in May as the seasonality trend indicated. The 4% selloff during the first three days of this week was really sharp. Could the Thursday and Friday's rally play another trick to retest the b/o point, then push down again? Seasonally it's possible and likely. May has about a 65% chance to close positively during the last 20 years. So be prepared for a tough month.
My net liq come down to 108K from last week's 141K, -33K. The realized gain is -43K since I had to roll so many long puts further out. I made a big mistake of moving some SPX longs closer after last Friday's ATH. I was planning to reduce my longs before the pullback. It didn't work out. Not only I was hit on the long side I was forced to reverse an SPX long to short due to the netliq below 100K during the 2% selloff on Wednesday. I failed to prepare to make stops for my recovery trades. My plan is to stop out at 2X of the premiums but I never enforced it. It could have saved me a big margin crunch and a wire transfer of 10K from ET.
There were not many good trades to report this week. Shadow Trader stayed on the side line mostly since last week which was a very smart move. My short IWM and SPY paid off but they were small. I exited half of my SQQQ with a little profit. I have not been able to do well with these leveraged ETFs.
Be prepared for some rough rides this summer. Stay calm!
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