The Sell Off Accelerated 4-23-22

 The selloff intensified after the majors tried to break to the upside earlier this week. The 20, 200 DSMA acted as resistants for SPX after it fall below last week. RUT is still far below its 200 DSMA. The 20 DSMA is resistant now. The three majors closed their third week of losses. The small caps had a small gain last week but also formed a bearish engulfing weekly bar like the others for the week. The charts are bearish for now. The downside targets are to retest the March lows at least. We could see a lower low if the retest failed. 

My IB holdings suffered a big drawdown this week. The netliq ended at 123K, down from 165K of last week. It's a 40K drawdown for the week. The weekly realized P/L is -32K. The premiums collected are a mere $900 since I had to spend more on hedges and buy $400 long puts to boost the margin during the 2.7% selloff on Friday. 

The 0 DTE suffered some losses with a smaller profit. It collected $900 for the week. I had to roll some short puts to next Monday due to the big selloff on Friday. The buy put hedge worked which eliminated some losses. 

The lessons of the week:

1. Don't forget to look at the forest. The bearish setup was clear looking back now. The majors below the 20 DSMA were clear signs of bearishness. I was fooled by the overnight and opening moves in the shorter time frames. The correct approach is to analyze it from the top-down. 

2. Obey my rules. I broke the -1+1 rule again last Thursday when there was a gap up. I tried to rescue an underwater SPX SC that is about 100 points ITM. Instead of waiting to see the true intention of the market, I made a big reversal order to add about 50 points to the long side. The market reversed when J Powell spoke about the rate hike the market broke down. I ended up holding the bag without an exit plan. My bias was wrong. I then added another LP assuming the market would hold. I broke the -1+1 rule here. Stick to the rules!!!

3. Be patient when the VIX is high or there is a big event during the day that could affect the market. I said that I wouldn't place any order before J Powell speaks last Thursday. I totally forget about it when the market gapped up and pushed higher after the opening.