SADDLE UP!
This ain't no Sesame Street. The bulls were on a murderous rampage today. Congrats to all who got a piece of the action!
The key question now is: Will it hold?
It would be more than fair for you to point out that the SPY broke above, held and then ripped past the 200-day simple moving average. This is clearly a technical bullish development. If I had to guess, this move was prompted by fears related to the bank sector contagion calming down.
Things do look peachy, but we aren't out of the woods. As you can see below, the FOMC meeting results, and a related press conference, will be posted tomorrow. There is currently at 86% chance of a 25bps rate hike. I don't think this hike alone will be incredibly bullish or bearish. I believe the major move tomorrow will be prompted by whatever Fed Chair Powell says/doesn't say. I wish I could tell you which direction is more statistically likely. In reality, this is a binary event. I would rather be reactive than predictive in the current environment. Personally, I believe this methodology offers better risk to reward setups.
Market Events: Wednesday, March 22nd
02:00 PM Fed Interest-Rate Decision (I'll be streaming this -- >)
02:30 PM Fed Chair Powell Press Conference (And this!)
Seasonality Update
S&P 500 Seasonal Bias (March 22nd)
- Bull Win Percentage: 40%
- Profit Factor: 0.84
- Bias: Leaning Bearish
Equity Curve -->
Current Account Value (March 21st)
$9,595
Daily Realized P&L: +$0
YTD Realized P&L: +$386
Closed Position(s)
None
New Position(s)
SPY CALL Credit Spread (5) April 14th
- Sold: $411 & Bought: $412 --> Credit: $22
- Max Return: $22 & Max Risk: $78
- Current Value: $31
- Profit Target: ~$10
- Profit Odds: 74%
SPY PUT Credit Spread (5) April 14th
- Sold: $380 & Bought: $379 --> Credit: $16
- Max Return: $16 & Max Risk: $84
- Current Value: $14
- Profit Target: ~$8
- Profit Odds: 79%
Reasoning: IRON CONDORS FOR THE WIN!!!
Current Position(s)
NVDA Call Credit Spread (2) March 31st
- Sold: $270 & Bought: $275 --> Credit: $71
- Max Return: $71 & Max Risk: $429
- Current Value: $138
- Profit Target: $25
- Profit Odds: 65%
OXY Put Credit Spread (10) March 31st
- Sold: $58 & Bought: $57 --> Credit: $20
- Max Return: $20 & Max Risk: $80
- Current Value: $23
- Profit Target: $8
- Profit Odds: 70%
QQQ Call Credit Spread (10) March 31st
- Sold: $312 & Bought: $313 --> Credit: $0.20
- Max Return: $20 & Max Risk: $80
- Current Value: $50
- Profit Target: $8
- Profit Odds: 55%
TSLA Call Credit Spread (4) March 31st
- Sold: $200 & Bought: $202.50 --> Credit: $37
- Max Return: $37 & Max Risk: $213
- Current Value: $110
- Profit Target: $15
- Profit Odds: 57%
JPM Put Credit Spread (5) April 6th
- Sold: $125 & Bought: $120 --> Credit: $100
- Max Return: $100 & Max Risk: $400
- Current Value: $84
- Profit Target: $40
- Profit Odds: 71%
SPY Iron Condor (5) April 6th
- $406/$407 Call Spread --> Credit: $23
- $374/$373 Put Spread --> Credit: $18
- Max Return: $41 & Max Risk: $59
- Current Value: $50
- Profit Target: $15
- Profit Odds: 88%
TSLA Call Credit Spread (5) April 6th
- Sold: $207.50 & Bought: $210 --> Credit: $40
- Max Return: $40 & Max Risk: $210
- Current Value: $75
- Profit Target: $15
- Profit Odds: 67%
SPY Iron Condor (5) April 14th
- $411/$412 Call Spread --> Credit: $20
- $375/$374 Put Spread --> Credit: $17
- Max Return: $37 & Max Risk: $63
- Current Value: $42
- Profit Target: $15
- Profit Odds: 74%
TLT Put Credit Spread (10) April 21st
- Sold: $101 & Bought: $100 --> Credit: $27
- Max Return: $27 & Max Risk: $73
- Current Value: $23
- Profit Target: $10
- Profit Odds: 72%
My Thoughts
Nothing too special to note today.
I'm continuing forward with my iron condor strategy. It will take roughly 1 month for this to start posting consistent returns. As always, patience pays.
In terms of everything else, we will have much more clarity on the situation after Powell's speech. Sure, I could make random predictions based on my gut, but that would be a waste of your time. No one truly knows what Powell will say besides Powell himself. I'll be paying close attention to his commentary on the state of deposits leaving banks. Not only will the overall market be volatile tomorrow, but I'm expecting the regional banking sector to be more erratic than ever.
Sit back, relax, and get ready for the crazy day ahead.
Thanks for reading -- Much love!
Notes
Max Return (Credit Spreads): The credit received when creating the position. This is achieved when you get to the expiration date and the price is below the sold contract for a Call Credit Spread and above the sold contract for a Put Credit Spread.
Max Risk (Credit Spreads): The difference between the spread's two strikes minus the credit received when the position was created.
Breakeven (Credit Spreads): The sold strike plus the credit for CCS and the strike minus the credit for PCS.
RISK WARNING: Trading involves HIGH RISK and YOU CAN LOSE a lot of money. Do not risk any money you cannot afford to lose. Trading is not suitable for all investors. We are not registered investment advisors. We do not provide trading or investment advice. We provide research and education through the issuance of statistical information containing no expression of opinion as to the investment merits of a particular security. Information contained herein should not be considered a solicitation to buy or sell any security or engage in a particular investment strategy. Past performance is not necessarily indicative of future results. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites.
Both of these trades hit if held until close -- 6 total units!
Both of these trades hit if held until close -- 6 total units!
SPY missed & QQQ hit
The Trump-China-Trade announcement from the NYT knocked me out of my position. The CCS's were sold at $1.80/ea and I was forced to buy them backl at $4.40 -- This means my realized loss was $3,120 :(
The hedge did exactly what hedge plays are meant to do. It balanced me out! These PCS's were sold at $0.85/ea and expired worthless -- THIS MEANS MY REALIZED GAIN WAS $2,975!
