The Bears Have Life.

January 21, 2022

Dear Trader, 

This was a black tape over our PnL kind of week, TGIF!

The stock market is an interesting game of real-time emotions

One week you can be feeling on top of the world…

...Then some weeks you're shaking your head.

That’s why it’s important to keep the variance of our emotional highs and lows to a minimum. 

It reminds me of what my running coach said. 

"Do you want to finish or do you want to run the marathon?"

When I ran my first marathon in Chicago, I wanted to finish.

Now, not only do I want to finish, I want the fastest pace I'm able to. 

But to do that, there's a lot of training and highs and lows through the journey. 

It's like those who approach the markets. 

Some want to make a little money, but others want to make a lot of money. 

Either way, there are ups and downs, and why it's important to focus on what we can control. 

That means sticking to the system and executing. 

Let’s talk about the CBOE Volatility Index (VIX), aka the “fear” index, which closed at 28.85, which is 2x the amount of fear. 

In previous weeks, I've said we're in a bull market until we're not.  

The Nasdaq is in correction territory and the S&P 500 is flirting with those levels right now.

Both indices have broken below the 200 SMA, which hasn't happened since the market crash in 2020. 

That means, it's time to buckle up and get ready for fast two-sided trading

That’s why we focus on the system and where money is going. 

Portfolio Update

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

On Monday:

No action.

On Tuesday:

Buy-to-open the FCX Feb. 18, 2022, $48/$55 call spread

On Wednesday:

No action. 

On Thursday:

Buy-to-open the AMC Jan. 28, 2022, $17/$15 put spread

On Friday:

Sell-to-close the AMC Jan. 28, 2022, $17/$15 put spread

Right now, we’re holding:

  • F Feb. 4, 2022, $25.50/26.50 call spread
  • F Feb. 4, 2022, $26/27 call spread
  • FCX Feb. 18, 2022, $48/$55 call spread

Trade Journal

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.

AMC Jan. 28, 2022, $17/$15 put spread

Outcome: Closed for 18% gain.

Notes: Sometimes as fast as our options gain in value, they quickly fall back. My job is to put us on the right side of the trade, but I also encourage you to take gains when they occur and not wait for an alert.  But as I promise, I’ll never leave you hanging on what to do next. This is real-world, real money education. 

No drinking for me until after the marathon on February 6th, but that doesn’t mean you can’t enjoy a fresh spicy margarita for me - TGIF! 

Have a great weekend and talk with you on Monday.

To your wealth, freedom, and options!

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%