Dear Trader,
The weather is hot, markets are hot and our win streak is on fire.
This week's market reminds me of Mark Twain’s quote “If you don't like the weather in New England now, just wait a few minutes.”
Last Friday, broad markets sold off on Fed's James Bullard’s comments on the Fed increasing rates quicker than expected.
Then broad markets rallied back with the S&P 500 and NASDAQ hitting new all-time highs.
We do have a position that expires today and we’ll talk more about that in a minute.
Even with today’s expiring position, we continue to have an incredible hot streak.
Over the last few months, we’ve had 18 wins, 6 losses and 2 scratch trades for an overall gain over 400%.
As I mentioned last week, make sure you take a moment and celebrate these victories.
Life moves quickly and we often don’t take enough time to pat ourselves on the back for taking action.
Now, the CBOE Volatility Index (VIX), aka the “fear” index, is right at our key 15 level.
From last week’s reading we saw a drop of 26% in volatility, which is significant.
But we’re still in a bull market and look for the stocks to trade higher with some bumps.
Now let’s talk shop.
Despite closing another winning trade this week, we have a position expiring today.
Today, this position will expire.
Unfortunately, we don’t have more time for this to play out.
There’s nothing that you need to do, and they will be removed from your account over the weekend.
Taking losses isn’t fun, but without the bitter, the sweet isn’t as sweet.
But remember…
The sweet part is making money and losses are part of the process.
Here’s a recap of what we did this week.
On Monday:
Buy-to-open the OXY July 16, 2021, $32/$35 call spread
On Tuesday:
Sell-to-close the OXY July 16, 2021, $32/$35 call spread
On Wednesday:
Buy-to-open the F July 16, 2021, $15.50/$16.50 call spread
On Thursday:
Nothing
On Friday:
Nothing.
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.
LI June 25, 2021, $25 put
Outcome: Expired worthless.
Notes: We took our shot and this didn’t work out.
OXY July 16, 2021, $32/$35 call spread
Outcome: Closed for a 71% gain.
Notes: We executed this perfectly for this position. We hit the target and the system says to take the profit.
That’s all for today.
Now it’s time to head to the pool with a fresh jalapeno margarita - TGIF!
I'll have a new trade on Monday and have a great weekend.
To your wealth, freedom, and options!
Joshua M. Belanger