Every day is a new day.
That motto couldn’t be more true as we navigate through our current market.
That was a trader’s motto every morning before the opening bell on the trading floor.
What happened yesterday, doesn’t matter today.
There’s no calibration of risk or value and the market action feels extreme; one day there’s a 3% decline, the next day we rally 3%.
While the action creates opportunity, the decision making and reaction has to be that much faster.
This is where you have to rely on experience and a system because the challenging aspect for a lot of investors or traders is that they want to think.
But you don’t have time to think, you have to just react.
For instance profit windows are so quick and if you don’t take the profit, it turns into a loser.
That also means stop losses trigger quickly and if we don’t exit, it turns it more of a loss.
Markets go in cycles, sometimes you feel like a genius other times you feel like you know nothing.
That’s emotions and the best part of being a human.
Markets are inconsistent, which is why there is always opportunity.
It’s easy to get down and give up, but I’ve seen the best traders have nasty drawdowns - only to have some of their best trading years.
Just remember, the sweet is never as sweet without the sour, and right now we know the sour.
So, we keep working and doing what we love and focus on getting back on track.
Next week is quadruple witching which happens every quarter — it’s when options and futures on indexes and equities expire (on the third Friday in March, June, September and December).
Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 21.
What we’ve seen over the last year is when the VIX level goes into the 20 area, we see a spike, which is due to a pull back in the S&P 500.
But during weeks of monthly options expiration like next Friday, we see stocks drift higher.
Now let’s talk shop.
Here’s a recap of what we did this week.
On Monday:
Buy-To-Open the Xtrackers Harvest CSI 300 China A-Shares ETF (NYSE: ASHR) April 1, 2021, $36 call (ASHR210401P00036000) up to $0.42 per contract or better, for the day.
Buy-To-Open the Cameco Corp. (NYSE: CCJ) March 19, 2021, $15 put (CCJ210319P00015000) up to $0.57 per contract or better, for the day.
On Wednesday:
Buy-To-Open the Schlumberger Limited (NYSE: SLB) June 18, 2021, $40 call (SLB210618C00040000) up to $0.69 per contract or better, for the day.
On Thursday:
Sell-To-Close the Xtrackers Harvest CSI 300 China A-Shares ETF (NYSE: ASHR) April 1, 2021, $36 put (ASHR210401P00036000) at the market.
Sell-To-Close the Cameco Corp. (NYSE: CCJ) March 19, 2021, $15 put (CCJ210319P00015000) at the market.
Right now, we’re holding:
This is our debriefing of every trade closed or expired to analyze what happened, why it happened and how it can be done better — like what the military uses after missions.
Xtrackers Harvest CSI 300 China A-Shares ETF (NYSE: ASHR) April 1, 2021, $36 put
Date: March 08, 2021
Reason: Our monitor triggered this alert after detecting a 300% increase in puts bought looking for shares to continue to pull back.
Outcome: 57% loss.
Notes: We executed, but not as planned. I fought the tape and instead of following the system as we planned, I called an audible and dug in. This is sloppy and inexcusable. We don’t want to sit around babysitting losers; we want to manage winners.
Cameco Corp. (NYSE: CCJ) March 19, 2021, $15 put (CCJ210319P00015000)
Date: March 08, 2021
Reason: Our monitor triggered this alert after detecting a 300% increase in puts bought looking for shares to continue to pull back.
Outcome: 73% loss.
Notes: We executed, but not as planned. I fought the tape and instead of following the system as we planned, I called an audible and dug in. This is sloppy and inexcusable. We don’t want to sit around babysitting losers, we want to manage winners.
It sounds like I’m being tough on myself, which I am. It’s critical in being honest and transparent because it allows us to get better each day.
That’s the best part of life, trying to get to the next level.
TGIF!
That’s all for this week and it’s about time for me to have a margarita by the pool.
Gave a great weekend and we'll have a new trade on Monday, have a great weekend.
To your wealth, freedom, and options!
Joshua M. Belanger
P.S. I will be doing a 60-minute live trading session on Tuesday, March 16, 2021 at 10:00 am est. I’ll be covering how to find Hot Money, answer some questions and place a few trades.
I’ll send you a link on Monday with more details on how to join me.