Week of May 1
This is Jay Powell's stock market. The last hike or?
Recap of last weeks action:
Im not going to bother with the fake modesty, if you followed my plan you made a stupid amount of money.
Massive massive winner. The absolute low of the week was 4049.35 before a 120 point rally in 2 days. SPX weekly options bought on Wednesday were 50x baggers. If you bought short dated calls you are buying a new car this weekend.
2. Accumulated puts, hold.
Massive winner. FRC rallied 18% from Friday close into Monday AH. Just like my first play in SPX, literally 0 to no MAE. No drawdown. Yes I am fully aware this dumped to the abyss afterwards but it doesn’t matter. Secure your bag and on to the next trade. Not your problem. On the other hand if you let a massively green trade like FRC go red, that’s 100% a problem with your execution. As I have preached many times in this blog, I don’t gamble on earnings or CPI or NFP. As some genuine advice, I love to gamble but I never do that with my portfolio. Betting on sports is much more exciting and you can keep a sort of compartmentalization between “work” and “play”. No edge in predicting what some random number generator spits out. In situations like this, trailing stop is the way to go. Even if you held through earnings (you shouldn’t have), you took like a 10% loss on shares at worst. PACW rallied as well.
Lastly, on April 18, I sent out an email to long $400 SPY puts for the June expiration
Another solid winner here. I alerted at 5.15. Puts peaked this Wednesday at around 8.55. Zero drawdown. I think maybe puts were red for about an hour after I bought them. Alot of huge twitter accounts have their followers bag holding puts for literally months enduring excruciating drawdowns. That’s not me, that’s not acceptable to me. Precise entry is everything for me. And as always, I am giving out just trade ideas, my wish is that you customize them to your style and risk tolerance. I am trading a decent amount of size personally, so I dont desire for mega lottos that go 2000% or instantly vaporize with a 10pt move offsides, I like consistent repeatable gains week after week after week. But I do get this question alot of how to leverage shorter expiries and delta for potentially bigger gains and it’s pretty simple. Buy options with less time and lower delta.
Onto next week. Here we are at 4200 again after that insane rally.
Next move for markets?