Keeping Cool & Calm During Market Downturns

October 7, 2022

Happy Friday!

It’s been a tough several weeks in the market.

It wasn't the ideal start for bulls kicking off the 4th quarter.

Just a few days ago the talking heads were screaming... buy da dip!

But that's trickiest part navigating a bear market, you never know when the rug pull happens.

Right now, this is a day traders market.

We've had two consecutive fast money trades, that collapsed the next day.

It's a double edged sword because we're getting great profit opportunities, but also frustrating we're not seeing any follow through.

Which is evidence enough that we're in a bear market.

We've done a good job with being patient and picking our spots.

Sometimes you do everything right and still lose.

As I keep mentioning about navigating a bear market.

It doesn't mean you're not going to make money, it's harder to make money.

Which is why we stay calm and focused.

It's okay to scale back, because risk is elevated with fast and larger swings.

More than ever is the time to relay on our training and experience to avoid panic.

I've traded through the financial crisis and learned that if you played loose, you'll avoid panicking.

I do that by scaling back the position size, which allows me to feel more relaxed and avoid making a poor decision.

By doing this, it helps save our emotional capital.

Since options we trade have a built-in stop loss, it’s best to risk the whole amount and let things play out.

At Hot Money Trader, I promise to navigate you through any type of market and come out on top.

Patience, persistence, and consistency are key.

The CBOE Volatility Index (VIX) closed this week at 31.

That’s the same reading from last week.

It indicates we will continue to see those 100 point swings in S&P 500. 

Now let’s talk shop.

Portfolio Update

Here’s a recap of what we did this week.

On Wednesday:

Buy-to-open WDC Oct. 7, 2022, $37/$40 call spread

Sell-to-close 50% WDC Oct. 7, 2022, $37/$40 call spread

On Thursday:

Sell-to-close all of WDC Oct. 7, 2022, $37/$40 call spread

Right now, we’re holding:

  • VTRS Oct 21, 2022, $10 call

Have a great weekend and it's time to enjoy a ice cold spicy margarita - TGIF! 

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%