Jet lag is always better when you are on a beach. This week is Krabi, Thailand. The bars all have wifi. The biggest challenge is to get my laptop in a good spot while sitting in a hammock.
Last week’s post is unlocked for all subscribers:
Update on USO (provided to premium subscribers in Chop, Chop, Chop) - I was definitely filled. And I have to admit, I was uncomfortable as I did not expect such a gap the day after the post. But this one has stayed profitable as IV continues to go up.
I held this position over the weekend. It looks like the below at the moment. I am adjusting my trade plan - my stop has been moved to my entry price. Over the past several months, I have shifted my trading methodology to NOT go red once my profit is over 30%. Let’s see how far this baby can go. If it reaches a double, I will sell one contract and convert the remaining contract to a spread by selling a lower strike put with the same expiry.
Note that in this period of chop, I have not done a lot of swing trading and have preferred to sit back and watch the fun while my capital sleeps.
As the market enters it’s next directional phase (looking like a downward move), I’ll likely put more in.
It seems that the S&P has decided which direction to take with a little assist from Silicon Valley Bank. As mentioned, I have not been too interested in jumping on a direction up or down until a decision was made. I’m now actively looking for shorts. (…and yes, my SPY call butterfly is not looking good - but it is a hedge after all!)
Confirmation for me is another daily close below the 200 sMA on the daily chart. My trade plan always has some of the following major elements:
Prognosis, up, down, or sideways - It is DOWN now!
Where am I wrong - One close back over the 200 sMA once I’m in a position.
Where is my target - Somewhere in the green box.
When is it going to get there - by the end of April, which is also when I’ll exit win or lose.
How much am I going to risk - 2% of my account. In this case, I’m going to stop myself out at a 50% loss if my technical stop (200 sMA) doesn’t hit, so the total risk on the table will be 4% of my account in terms of option premium.
Any additional:
If I get into a position, I will convert to a spread by selling a lower strike if and when my position profit reaches 100%.
I know many traders that double down when a trade doesn’t go their way. I like to double down when I’m right. If this trade goes my way and I have already adjusted to a spread, I will add additional contracts if SPY closes below $375.
As always, please do your own due diligence
FYI - there was no short entry for SPY today.