Dear Trader,
I’m back in Chicago and it’s a gorgeous Fall day in October.
The recent weakness in the market is an unfriendly reminder that there will be red months and no such thing as a risk-less return.
Yet, many panic and make poor decisions to jump ship chasing the next shiny object.
There’s a reason why you won’t see me panic, because I know my risk.
It’s easier said than done, but we focus on executing the best we can and staying the course.
Luckily, we added another winner to the board for a 121% gain.
Now, the CBOE Volatility Index (VIX), aka the “fear” index, is at 21 above our key 15 level.
That means volatility increased by 4 points from last week's reading of 17.
October tends to be a volatile month which is why we see that reading is higher than before.
But even with the shallow pullback, we still need to see a massive pullback to take us out of the continued bullish regime.
Things will get very interesting in the coming weeks - buckle up!
Now let’s talk shop.
Here’s a recap of what we did this week.
On Monday:
Sell-to-close OXY October 15, 2021, $27/$30 call spread
Buy-to-open HD October 8, 2021, $345/$350 call spread
On Tuesday:
No action.
On Wednesday:
Buy-to-open the OXY October 29, 2021, $31/$35 call spread
On Thursday:
No action.
On Friday:
No action.
Right now, we’re holding:
This is my journal which is a debrief 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.
OXY October 15, 2021, $27/$30 call spread
Outcome:121% gain.
Notes: We executed this perfectly. We sold into the spike higher to lock in gains and then we followed the continued bullish activity on the pullback into a new position.
Now it’s time to get my 7 mile run in before I have a fresh jalapeno margarita - TGIF!
Have a great weekend and talk with you on Monday.
To your wealth, freedom, and options!
Joshua M. Belanger