The FOMC Selloff 9-22-23

 It's a volatile week with FOMC on Wednesday. J. Powell indicated there could be another rate hike this year. The market didn't like it and sold off. The selloff continued on Thursday. The attempted recovery was knocked down by the end of the day. SPX lost 140 points in the last 3 days. It closed at 4320, down from 4470. A couple major support lines were breached. We are into the late September to early October downturn in the seasonality. 

The IB portfolio suffered a significant drawdown with this selloff. The IB Netliq is -13% from 339K to 296K. I focused on eliminating SCs instead of reducing LPs. I underestimated the magnitude of the selloff. The options' value increased 19% from -175K to -216K. Both are at the worst levels since last May. The leverage is up to 110 from 85 last week. The realized P/L is $20,574. It's mainly from the exited SC positions. The sea-saw is up in SP positions. Delta is up to 500. The collected cash is only $800. I had to spend on buying hedges. The total positions are C8-2, P9-0. I made 64 trades for the week. It's almost 13 trades per day. The commission cost is $221. The option holdings apparently couldn't withstand more than 1% market swings. The only way to reduce such a significant drawdown is to have fewer positions. 

The two small accounts got slapped with the wild swings. The realized P/L is -$2313. The cash collected is $$2688. IB and TOS made $2778 and -90 each. TOS has 1 SP DITM. IB has 2 SP DITM. I may reverse one position in IBP. 

Lessons and Plan:

1. I continue to work on my calmness and patience. 

2. A mid-day meditation is helpful.

3. I need to react quickly when the trend changes. 

4. Set my priorities straight according to delta and netliq conditions. 

         

A Failed Breakout 9-15-23

 The trendless swings continued this week. CPI and PPI came out hotter than expected. The market rallied. It reversed and erased the two days' gains on Friday. It turned out to be a fake breakout. SPX is back between the 50/20 DMA again. The FOMC meeting is next Wednesday. The market is expecting the Fed to pause rate hiking in September. The volatile 2nd half of September begins next week seasonally. 

IBQ Netliq is up 4.5% from 324K to 339K this week. The options' value is down 7.6% from -189.2K to -174.8K. The leverage is down from 92 to 84. The realized P/L is -$1959. The drawdown is getting smaller. The collected cash is only $1146. The total positions are C 12+1, P 9-2. I made 48 trades which is 12 less than last week. The commission cost is $190. I made some progress in terms of Netliq increase and the total positions. 

The two small accounts continue to struggle. The realized P/L is $5646 in recovery. The cash collected is $2668. IBP and TOS made $1775, $893 each. TOS has 2 SC and 1 SP positions left. IBP has an alarming of 3 SC and 4 SP. I need to reduce the positions in IBP. 

Lessons and Plan:

1. I started to remind myself to be calm, patient, and professional during the work days. It needs to happen more often. 

2. I am still struggling with my slow and fast thinking, conscious and subconscious. 

3. Identify the trend and establish the levels in the morning. Be ready to change my bias when the market changes. 

4. My main goal is to reduce my total positions in all accounts next week. Stay with the trend. 

A Trendless Down Week 9-8-23

 The major indices ended down for this Labor Day shortened week. There was little economic news for the week. The market moved up and down widely. It closed in a range bound inside-week. SPX ended the between its 20 and 50 DMA. It may be waiting for the CPI report on Wednesday. Seasonally speaking, September is a low return and neutral or bearish month. 

IBP Netliq closed up 1.2% from 318K to 324K for the week. It's still down 4K from last week. All the numbers here include last Friday, Sept 1st. The options' value is down 3% from -195.6K to -189.2K. The leverage is down from 96-92. The realized P/L is -$13,090, on top of last week's -$64,370. The collected cash is only $600, plus $1,700 interest for August. The total positions increased by 2 to SC 11 and SP 11. I made 60 trades for the 5 days. It's an average of 12 per day. The commissions cost $208. The week had a lot of effort and a lack of progress overall. I am still in the mud. 

The two small accounts are in the 4th month of the dump. The trendless swings didn't provide much relief. They are in the sea-saw situation. The realized P/L is $26,305 in recovery. The cash received is only $1,833. IBP and TOS made $1293 and $543 each. 

Lessons and Plan:

1. My intention is calm, patient, and professional. It takes time to root in. 

2. The anxiety and fear of losing are two major factors during my work.

3. I am working on my self-discipline. I tend to look for excuses to break my rules. 

4. I like this quote: "What you get by achieving your goals is not as important as what you become by achieving your goals." 

5. I am considering buying back some ITM positions to reduce my market exposures. I have to reduce my total positions before my October trip to China.     

      

The Volatile August 2023 9-2-23

 The volatile August is finally behind us. All major indices closed lower for the month. It was a volatile but trendless month. SPX traded 200-point range. It ended back to the breakdown point above 4500. We may see an up-range mode for the first half of September seasonally. The FOMC meeting is in mid-September. I will follow the price actions and be flexible in my bias. 

IBQ Netliq ended at 318.6K vs. 320.7K from July. It's basically unchanged. The options' value is up 1.6% from -192.6K to -195.6K. It's flat as well. The leverage is the same at 96. However, the realized P/L is -$41,996. The large swings forced me to roll the DITM positions on both sides. The collected cash is $12,769. It's only a 4% return of the netliq. It will be $14,659 if including the +$1800 difference. The total positions are 18. It's one less than July. I moved all RUTs to SPX. The total trades were 379, 29 more than July's. It's an average of 16.5 per workday. I am still over-trading. The commission cost was $1462. It's 11.5% of the collected cash. 

The two small accounts have been in the slump for 3 months now. The cost of time and opportunities drag on. The realized recovery P/L is $40,522. It's better than July's -$28,684. IBP and TOS collected $$6420 and $5006 each. It's about 6.4% and 5% return based on their 100K options B/P.  

Lessons and Plan for September:

1. I still break my rules from time to time. I tend to get emotional during major events. 

2. I will continue to practice self-awareness and fast, slow thinking. 

3. Knowing the time of the day helps me to be patient. 

  

 

A Rally In The Last Week Of August 9-1-23

 The major indices closed the last week of August with a rally. The Jackson Hole reversal gave a clue last Friday. The downward slope of 50 DMA didn't provide much resistance. SPX is in a  Fib retrace/ABC pattern or an inversed head and shoulders pattern on the daily chart. It's in an upswing period seasonally. Mr. Market may tell us its true intention next week or so. 

IBP Netliq is down 5% from 346K to 328K (including the 10K to BOA). For accounting purposes, this Friday, Sept 1 is counted into next week. The options' value is up 13% from -170K to -195K. The leverage is up 7% from 89 to 96. The realized P/L is -$64,370. It's bigger than last week's -40K. The collected cash is only $3120. The total positions are 9 SCs and 11 SPs. The number of positions is the same but reversed in directions. I made 69 trades in the 4 days and paid $300 in commissions. 

 I didn't switch my bearish bias quickly after Friday's Jackson Hole reversal. My SCs were concentrated on this week. It was a double loss after being hit on the SP side last week. 

The two small accounts ended in the dump for the third month. The rally of last week pushed them back under the water again. The realized P/L is $20996. The total cash collected is $3285. IBP and TOS made $2154 and 1131 each. 

The lessons and plan will be addressed in my August review.