The majors reversed the bear market rally after several attempts to break up early this week. It was a big reversal day on Thursday in anticipation of the CPI report on Friday. The CPI report came out at 8.6% year over year. It's at 40 years record. The futures gaped down over 1% on the worse-than-expected report. SPX and RUT closed at 3900, and 1800 respectively. It was a very volatile selloff. SPX fell 5.6% in two days.
My portfolios took a big hit for the week. IB Netliq fell 30K from 127 to 97K. I had to borrow another 10K from ETQ on Friday in order to roll some positions. The leverage jumped from 376 to 481. I lost $5000 cash on Thursday's assignment. It was mainly caused by my poor risk management during the EOD selloff. The realized P/L is $14,915 on paper. There were some SCs unwinded. Some of the LCs are underwater now. This system is not working in the current market conditions. There is always one side underwater.
My small accounts took a hit too. ETP had an SP 3X4030 assignment on Thursday's PM selloff. I neglected to hedge the 2nd leg of 4040 SP. It caused $1,000. I had to roll the threatened SP to the next day. They were rolled to Monday again. The booked loss is $10,635 for the week.
Lessons learned:
1. Be quick to change directional bias as the price action changes;
2. Be aggressive to adjust my positions once the market changes directions;
3. Be proactive in hedging short positions. Don't worry about the cost too much;
4. The cost of hedging is smaller than the stop losses most of the time.
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