Posted by Martin April 02, 2018
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Rout Today, Rally Tomorrow, Rout Next Day, And So On


S&P 500  2,581.88 -58.99 (-2.23%)  Dow 30  23,644.19 -458.92 (-1.90%)  Nasdaq  6,870.12 -193.33 (-2.74%)
 

S&P PanicAnother rout in the markets today. The markets lost 88 points during the day, so it was quite encouraging to see that it recovered by the end of the day and we only lost 59 points. That means, that so far, this market behaves as expected.

What are the expectations for the market? What this market may do?

 
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Posted by Martin March 31, 2018
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March 2018 trading, investing, results


February was bad. Unfortunately, March on Wall Street wasn’t any better. The slump in stocks continued and S&P 500 continue sliding down. The first week of March looked promising. The markets went up and it all looked that we are finally on the path of recovery.

Then Trump announced his tariffs shame aimed against China and excluding all others. Those who hoped in growth of the US steel got slammed as major steel exporters got exception and China threaten Trump with large retaliation.

And the Wall Street used this mess as a good excuse to dump stocks again. A March toll? A loss of 7.11%

But, I do not feel bad about it. As a dividend investor I welcome this drop and all great dividend stocks being on sale. and I wish this would last for some time! I wish the stocks would go lower even more!

 
Trading Results
 

As an options trader I pretty much do not care where the market goes. That’s the beauty of trading the options. Options will allow you to make money in any situation – if done right.

My only concern, in this market slump, is to be on the right side of the trend. Many of my trades were bullish. If this market is truly changing into a bear market (which I do not believe we are there) these bullish trades would hurt. There is a way to revert them into bearish trades but it will require capital reserves. And my concern is, will my accounts have enough money in reserves to trade through the reversal?

In march we made the most money I have ever made trading options in a month. The final revenue for March 2018 was $18,124.40 dollars!

Now, the biggest task in the coming months will be to retain the revenue (and a few more bucks along with it).

 

 · Dividend stock investing

 

When I started trading in 2006 my goal always was to make enough money trading which can be invested into dividend stocks.

Later on, I got into options and realized that options can provide the dreamed income which can be invested.

My next goal then is to make enough money to be invested into dividend growth stocks but also provide living. I am not there yet. But I study hard and learn to get there.

Here is a review of all accounts stock purchases made in February:

 
Traditional IRA
Trading Results
 

ROTH IRA
Trading Results
 

TD account
TBD
 

In March we purchased the following shares:

 
Dividend growth stocks

 

 · Dividend Income

 

ROTH IRA dividend income
Trading Results
 

IRA dividend income
Trading Results

 

 · Market outlook

 

I am still bullish but I think the bull market is getting closer to its end. My estimate is end of 2018 or first half of 2019. I believe it will be partially due to Trump’s incompetent and protectionist policy which would kill tax cut benefits and lead to the economy slowdown. But before all this ever happens I believe we will see yet one more all time high and then we may see troubles unfolding. But I may be wrong. I am usually always wrong in predicting the market.

I want to trade the market no matter what it does. That’s my ultimate goal – to learn how to trade the market up or down. Make money no matter what the direction is.

That however requires a few things:

1) Discipline and not over trade. Always have enough money in your account to sustain drops like this one in February and be able to manage your trades, adjust them, and escape bad trades. If you have a small account, trade only one trade at a time, or save more money before you trade.

2) Stay calm. Do not panic. If you are in a trouble, roll your trades away to buy time and then when all is calm, adjust.

3) Do not sell your stocks when they go down. Wait until all is over. Remember why you bought the stocks in the first place. I bought mine for dividends. Then I don’t care what the price is doing. I am not selling for capital appreciation. I am a dividend investor. At the end of any panic or bear market there will be a start of a new bull. If you invested before 2008, sit through 2008 selloff, reinvested dividends, and even bought more shares, your account is not way higher than before 2007 end.

4) If you want to be a bit active investor and trader, learn and study the markets. There is always a lot to learn. Play with your trading positions, simulate your options and way how to roll them, fix them, or adjust them even if you do not do it. But the trading platform will show you what you can do and if you see that your situation is hopeless, learn what else you can do to adjust a trade. For example, you have a deep in the money put spread. That is impossible to fix on its own. You play with the trades and find out that you can roll into calls for a small debit and sell new OTM put spread to offset the debit.

5) If everything goes your way DO NOT BE GREEDY!!! Boy how may times I was guilty of being greedy and opening more trades because everything was great and all trades were winning just to see getting myself in trouble the very next day when the market changed direction.

There are many possibilities to trade. Learn them and find those which work best to you and if you stay calm and never panic, be greedy, base your trades on expectations rather than trading what you see, you will prosper and be consistent.
 




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Posted by Martin March 29, 2018
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Off Coloring Easter Eggs


S&P 500  2640.00 +35.87 (+1.38%)  Dow 30  24103.11 +254.69 (+1.07%)  Nasdaq  7063.44 +114.22 (+1.64%)
 

S&P PanicAs one trader put it today – “the markets would go higher today as traders are off coloring the eggs…”

So, the markets went up today… tomorrow, we are closed for Easter and on Monday we will see what’s going to happen next. I have no idea and my expectations are mixed. All we can do is to wait and see.

 
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Posted by Martin March 28, 2018
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200 DMA holding: consolidation or more pain coming?


S&P 500  2605.00 -7.62 (-0.29%)  Dow 30  23848.42 -9.29 (-0.04%)  Nasdaq  6949.23 -59.58 (-0.85%)
 

S&P PanicThe market was dragged down by technology stocks again today. But the draw down was as violent as yesterday or last week. It doesn’t mean that this can turn tomorrow into more selling.

The stock market hold 200 DMA so far but will that level hold? Here is what I think.

 
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Posted by Martin March 27, 2018
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The pain


S&P 500  2612.62 -45.93 (-1.73%)  Dow 30  23857.71 -344.89 (-1.43%)  Nasdaq  7008.81 -211.74 (-2.93%)
 

S&P PanicThe rebound on Monday didn’t last long. Today, the markets tanked again dragged down by technology stocks. So far 200 DMA holds but the more often we knock on it the more likely we break down. Also, the markets are now creating lower highs. Technically, this is a problem.
 
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Posted by Martin March 26, 2018
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A Large Rebound Eases Tensions, Will It Last?


S&P PanicWhat I expected on Friday came on Monday. A significant bounce. But will this turn into a recovery or is it a dead cat bounce for further selloff? I do not know and cannot predict. However, given the markets erratic behavior and fast reactions this may turn into a recovery.

We did a few trades today to take advantage of a rally plus some rolling. It was successful. We received nice credit and rolled some SPX trades lower. However, I have a hunch that it would be wise to stay aside and get a clear signal from the market where are we actually going from here.
 
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Posted by Martin March 25, 2018
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An Expected Bounce Turned Into a Panic… What’s Next in the Markets?


S&P PanicHave you noticed that these days when markets are tumbling our cheerleader-in-chief is suddenly missing? When the markets were rising breaking all time high records, Trump was tweeting every week boasting about the markets.

Today, silence.

Our accounts took a hit when our market value dropped by $21,000 dollars which represents 16% overall draw-down. But we are not overly concerned about this drop as in none of our accounts we were forced to take a loss. In fact, rolling many of our trades generated income and when this market either settles down and/or goes back up, we will make even more money.

The overall market sentiment is very pessimistic which is bullish for the markets.

We can see other clues, such as Forex markets telling a different story about this market and trade war fears which again provides a bullish outlook.

We are very oversold today which may drive the markets up next week.

China is not much into a full scale trade war which will again settle the markets.
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Posted by Martin March 22, 2018
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We survived FED’s hike but Trump makes sure your 401k goes down the toilet


S&P PanicYes we survived one potential catastrophe from FED but Trump makes sure we have another coming. His tariffs on China sparked enormous fear on Chinese retaliation and we sold off heavily.

With tariffs, we are in fact cutting a tree branch underneath ourselves. It will not help the US. It didn’t in the past and it will not help today either.

When a selloff like this happens and you get caught with trades now against you you the best thing you can do is wait it out. Do not trade it do not adjust trades unless you must (for example expiration is near). Wait and do nothing. When all this settles the trade will improve and most likely you will be rolling at a better situation.

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Posted by Martin March 21, 2018
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Markets survived FED’s hike, sky didn’t collapse…


S&P PanicFED raised rates today and signaled more to come (although as not as many as spooked investors feared) and nothing happened. The world didn’t end, sky didn’t fall, the Universe didn’t collapse, and spooky investors can finally move on and fear something else.

Today, I again was busy with other stuff and couldn’t do trading. Only two open trades closed for 0.05 debit (with almost a full profit). When I open a trade and that trade executes, I immediately place a closing trade as GTC order for 0.05 debit (or as per our strategy) to automatically close any trade once the options price reaches the limit. Then I can forget that trade (sort of).

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Posted by Martin March 20, 2018
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Markets held 2700 support today


S&P PanicAs posted earlier I identified a support at 2700 level (or around) and today, the market held that level although the trend was gloomy. I expected more turmoil in regards to FED (which is still coming on us) and Trump’s tariffs (this still can come back and spook the investors who already crapped their pants enough this last two weeks).

For our funds, trading was slow today. I was busy with other things and also wasn’t in mood of trading. So I decided to skip it. I did only a handful trades today, and I bought a new dividend aristocrat to our portfolio

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