Anotha One
The bull party went into another inning, and it's not showing any signs of slowing down. Social sentiment is positive, the technicals are positive and the seasonal bias is positive.
Ya know what they say about three positives? It's still positive.
The major news of the day relates to oil. OPEC+ decided to cut their petroleum output by 1.6M barrels per day. When supply drops and demand remains constant, price is forced upward. Oil's price quickly jumped 8% and all oil-related stocks followed suit.
Tomorrow will most likely be another news dominant day. Most major media is reporting that there will be significant updates in the Trump indictment saga -- potentially his arraignment. It's tough to predict if this will have an impact on the stock market, but it's worthwhile to pay attention to. Excluding the Trump curveball, tomorrow's seasonal bias is extremely bullish. This isn't a guarantee, but I believe the odds are favoring a bullish continuation in the SPY & the oil sector.
PSA: The market will be closed Friday, April 7th in observation of Good Friday. Additionally, the Unemployment Report will be dropping at 8:30am ET that morning.
Market Events: Monday, April 4th
10:00 AM Factory Orders
10:00 AM Job Openings
06:00 PM Cleveland Fed President Mester Speaks
Seasonality Update
S&P 500 Seasonal Bias (April 4th)
- Bull Win Percentage: 76%
- Profit Factor: 4.30
- Bias: Bullish
Equity Curve -->
Current Account Value (April 3rd) +$54
$10,971.76
Daily Realized P&L: +$54
YTD Realized P&L: +$400
Closed Position(s) +$54
SPY $386/$385Put Credit Spread (3) April 6th
- Original Credit: $19
- Closed Debit: $1
- P&L: +$54 (+95%)
Current Position(s)
SPY Call Credit Spread (5) April 6th
- Sold: $406 & Bought: $407 --> Credit: $12
- Max Return: $23 & Max Risk: $77
- Current Value: $82
- Profit Target: $10
- Profit Odds: 22%
SPY Iron Condor (3) April 6th
- $411/$412 Call Spread --> Credit: $18
- $386/$385 Put Spread --> Credit: $19
- Max Return: $37 & Max Risk: $63
- Current Value: $51
- Profit Target: $15
- Profit Odds: 50%
TSLA Call Credit Spread (5) April 6th
- Sold: $207.50 & Bought: $210 --> Credit: $40
- Max Return: $40 & Max Risk: $210
- Current Value: $26
- Profit Target: $15
- Profit Odds: 87%
SPY Iron Condor (3) April 10th
- $407/$408 Call Spread --> Credit: $23
- $387/$386 Put Spread --> Credit: $16
- Max Return: $39 & Max Risk: $61
- Current Value: $71
- Profit Target: $15
- Profit Odds: 31%
SPY Iron Condor (3) April 10th
- $405/$406 Call Spread --> Credit: $22
- $384/$383 Put Spread --> Credit: $16
- Max Return: $38 & Max Risk: $62
- Current Value: $80
- Profit Target: $15
- Profit Odds: 24%
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: $56
- Profit Target: $15
- Profit Odds: 49%
SPY Iron Condor (5) April 14th
- $413/$414 Call Spread --> Credit: $18
- $380/$379 Put Spread --> Credit: $16
- Max Return: $34 & Max Risk: $66
- Current Value: $49
- Profit Target: $15
- Profit Odds: 56%
TLT Put Credit Spread (10) April 21st
- Sold: $101 & Bought: $100 --> Credit: $27
- Max Return: $27 & Max Risk: $73
- Current Value: $8
- Profit Target: $7
- Profit Odds: 90%
New Position(s)
SPY Call Credit Spread (5) April 21st
- Sold: $420 & Bought: $422 --> Credit: $48
- Max Return: $48 & Max Risk: $152
- Current Value: $25
- Profit Target: $15
- Profit Odds: 74%
SPY Put Credit Spread (5) April 21st
- Sold: $397 & Bought: $395 --> Credit: $30
- Max Return: $30 & Max Risk: $170
- Current Value: $55
- Profit Target: $10
- Profit Odds: 81%
Reasoning: A continuaion of the Iron Condor strategy.
My Thoughts
If you have a bullish position, this is the environment that you would continually lock in your profits as the market pushes upward. You don't need to go all in and all out at one. Scaling (aka pyramiding) in and out is generally a more profitable strategy. As discussed in the last newsletter, I don't think the current risk to reward ratio is favorable. If you missed this swing trade, don't chase. Waiting for the next major setup is the optimal methodology. I know that's boring and tests your discipline, but it's an absolute must if you want to survive.
I think an opportunity is starting to show itself with Tesla. TSLA broke below and closed below its support trendline. It's now knocking on the door of a bear channel breakdown. If $186 doesn't hold, I'll be watching $176 followed by $164.
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!
