Posted by Martin January 20, 2022
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The market bounced, was it enough selling or will we see more?

After Wednesday’s market selloff we finally got a bounce. This was a second bounce last week. The question is, will a momentum hold followed by a rally – a sustainable rally, or are we seeing just a relief bounce/rally and renewed selling next week? We must wait to see.

Bearish sentiment, not so bearish market

When reviewing social media, mainly YouTube, you can see posts all calling for a crash, recession, mother of all crashes, and all the creators are telling their audience how they sold out of their positions. Their thumbnails all display flames burning behind their backs, charts crashing down through the floor, scared faces, and sensational shouts about the inevitable end of the world.

But it all indicates one thing – none of these people actually understand what forces drive the market.

I do not want to sound patronizing or pretend I am a smart cookie here. I actually didn’t know myself either until about a year ago when I learned a lot of tricks on how to look at the market to determine its health. And since I started learning and watching these indicators, I started seeing discrepancies between the market’s temporary mood and its overall health. In other words, when all the Youtubers are predicting a recession while the market is selling off, I see a few indicators telling me that there is no recession coming and that the selling is most likely a temporary correction. A good opportunity to buy a few shares of good companies.

Among those few indicators, I watch is a put-call ratio. A normal level is 0.85 – 0.90. A neutral level is 1.00. Anything below that indicates bullishness, anything above that bearishness. Look below:

The put-call ratio went up to 1.075 during this selloff. It didn’t even exceed December’s highs. And it ticked only a few tiny points above the 1.00 level. What does it tell you? It tells me that all those bears out there are either totally dumb and do not know what they are doing, or actually do not believe in what they are preaching because no one is rushing to buy puts to hedge against the imminent crash or recession. The market doesn’t expect one.

When looking at another indicator such as the VIX futures structure, I see the exact same thing. The market doesn’t expect any recession or imminent crash. At least not yet, not as of today.

And those who sold off are now sitting on a pile of cash that will proper this market higher as soon as these people start feeling the FOMO. If we have bottomed, expect a face-ripping rally.

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Posted by Martin January 18, 2022
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Market is still going lower but you should not panic

It is difficult to watch your portfolio value slump when the market is selling off. I am down almost $7k as of today. But I am not worried about it. Why?

It is because I hold good quality stocks. At least, I think they are good quality companies. And I haven’t sold a single share. In fact, I bought more shares of stocks like OHI and I plan on adding more shares of AAPL, SNOW, or TSLA. But I am waiting because I think, this market will provide even better prices as weak hands are panicking and selling.

Investors should be selling stocks that have high valuations and make no money (typically what Cathy Woods invests in) but not good quality stocks like Apple or even Tesla. Tesla may be highly valued but it is still a growing company and it is making cash hand over the fist, like Apple does, reinvests, and delivers. If you look at Coca-Cola (KO) that stock is trading at a premium constantly. Maybe today, when investors are dumping everything it may have gone lower already.

And I am optimistic and still think, this market will provide great returns in 2022. We just must wait out this volatility, enormous bearishness, and panic over nothing. And even a 10%, or 20% correction is nothing in the view of my investing and trading horizon. In fact, I would like this market to crash lower as I plan on picking up the leftover crumbs.

In my newsletter last week I wrote that if the recent support at $4,675 holds, expect the market to resume an uptrend and continue to the $4,875 level.

Then I added that if that level won’t hold, expect the market to go to $4,500 level:

Today, it is obvious that the market couldn’t hold that level and I expect it to continue lower to $4,500 level and possibly even down to 200-day moving average at $4,440 level. It would be a great opportunity to see that drop. I would be able to buy a lot of cheap stocks!

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Posted by Martin January 16, 2022
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2022 Week 02 investing and trading report

The market keeps its choppy trading on fears. Investors are getting rid of the high multiple stocks and with the bathwater, they are pouring out the baby too. The selling had an impact on our net-liq although not as bad as the prior week. Our options trading increased slightly too as we were rebalancing our portfolio options holdings.

Here is our investing and trading report:

Account Value:	$98,156.02	-$574.92	-0.58%
Options trading results
Options Premiums Received:	$402.00
01 January 2022 Options:	$4,258.00	+4.34%
Options Premiums YTD:	$4,258.00	+4.34%
Dividend income results
Dividends Received:	$90.00
01 January 2022 Dividends:	$226.25
Dividends YTD:	$226.25
Portfolio metrics
Portfolio Yield:	4.84%
Portfolio Dividend Growth:	8.80%
Ann. Div Income & YOC in 10 yrs:	$26,029.25	21.58%
Ann. Div Income & YOC in 20 yrs:	$287,639.80	238.44%
Ann. Div Income & YOC in 25 yrs:	$1,701,307.25	1410.30%
Ann. Div Income & YOC in 30 yrs:	$18,084,216.27	14,990.96%
Portfolio Alpha:	-2.07%
Portfolio Weighted Beta:	0.60
CAGR:	537.50%
AROC:	4.39%
TROC:	11.44%
Our 2022 Goal
2022 Dividend Goal:	$4,800.00	4.71%	In Progress
2022 Portfolio Value Goal:	$151,638.03	64.73%	In Progress
6-year Portfolio Value Goal:	$175,000.00	56.09%	In Progress
10-year Portfolio Value Goal:	$1,000,000.00	9.82%	In Progress

Dividend Investing and Trading Report

Last week we have received $90.00 in dividends bringing January’s dividend income to $226.25.

We bought:

20 shares of RYLD
5 shares of IEP

We also sold the following shares as the stocks didn’t perform as expected:

10 shares of SPLG
10 shares of SPYG

Here you can see our dividend income per stock holding:

Growth stocks Investing and Trading Report

Last week we didn’t buy any new positions in growth stocks.

Options Investing and Trading Report

Last week we rolled a few of our strangle trades to keep our account safe. Each time the stock moved up or down towards one or the other strike price, it consumed our buying power. Rolling the trade to the center of our strangle, we brought in credit and released buying power.

These adjustments delivered our January income by $402.00 bringing January total to $4,258.00.

We were actively trading our SPX strategy that delivered -$595.00 weekly income (loss).

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.

Expected Future Dividend Income

We have received $90.00 in dividends last week. Our portfolio currently yields 4.84% at $98,156.02 market value.

Our projected annual dividend income in 10 years is $26,029.25 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.

We are also set to receive a $4,692.63 annual dividend income. We are 18.03% of our 10 year goal of $26,029.25 dividend income.

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

Market value of our holdings

Our non-adjusted stock holdings market value decreased from $131,541.85 to $131,493.57 last week.

In 2022 we plan on accumulating dividend stocks, monetizing these positions, HFEA strategy, and SPX trading. We plan on raising more of our holdings to 100 shares so we can start selling covered calls. We continued rebalancing our options trades that released buying power significantly. That allowed us to start buying shares of our interest again.

Our goal is to accumulate 100 shares of dividend growth stocks we liked and then start selling covered calls or strangles around those positions. We also planed on reinvesting all dividends back to those holdings.

Investing and trading ROI

Our options trading delivered a 4.34% monthly ROI in January 2022, totaling a 4.34% ROI YTD. We hope that in 2022 we exceed our 45% annual revenue selling options against dividend stocks target!

Our entire account is down -6.20% underperforming our projections and the market.

Our options trading averaged $4,258.00 per month this year. If this trend continues, we are on track to make $51,096.00 trading options in 2022. As of today, we have made $4,258.00 trading options.

Old SPX trades repair

This week, we didn’t adjust our old SPX trades. Our goal is to reach a level where we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

We however traded our SPX put credit spread strategy which you will be able to review in my next report.

Market Outlook

The stock market continued to struggle with the trend. It failed to go higher and continued being pressured down by interest rate fear when tech stocks were selling off. But we had a few bright moments in the market trend when the buyers stepped in and bought a fairly large morning selloff. On both occasions, the market closed in green. I expect the market to stabilize and move higher propped by earnings, given that the earnings reports will be good and companies also provide positive guidance. If not, more selling may come.

If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.

Investing and trading report in charts

Account Net-Liq

Account Stocks holding

Last week, S&P 500 grew 61.19% since we opened our portfolio while our portfolio grew 28.88%. On YTD basis, the S&P 500 fell -3.57% and our portfolio -0.90%. This clearly indicates that our stock holdings performed better than the market.

The numbers above apply to our stock holdings only. Our overall account net-liq dropped by -6.20% this year.

Stock holdings Growth YTD

I expect our stock holdings to start outperforming the market hopefully soon.

Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two and we accomplished 9.82% of that goal.

Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM) and today we accomplished 56.09% of that goal.

Our 2022 year goal is to grow this account to a $151,638.03. and today we accomplished 64.73% of this goal.

Investing and Trading Report – Options Monthly Income

Investing and Trading Report – Options Annual Income

Our dividend goal and future dividends

We planned to make $4,800.00 in dividend income in 2022. As of today, we received $226.25. This is in line with our projected dividend goal for January 2022. We also accumulated enough shares to start making $4,692.63 a year.

Our account cumulative return

The chart below indicates our cumulative adjusted return since we started tracking this metric.

Here is the cumulative return for the year 2022:

Our win ratio overall:

Our win ratio for 2022:

As of today, our account overall cumulative return is 46.77% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.) and our 2022 cumulative return is -0.58%.

I have a favor to ask. If you like this report, please, hit the like button so I know that there is enough audience that like this content. Also if there is something you want to know or you want me to change this report to a different format, let me know in the comments section.

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Posted by Martin January 16, 2022
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2022 SPX put credit spreads trading review – week 02

We finished the second week on a down note. As the market was extremely choppy, we had to close a few trades for a loss and we skipped pretty much all trades except our Friday trade because all signals were negative. We finished the week down -10.49% while SPX lost -0.30% only. However, our account is still up 40.97% since the beginning of this program.

Initial trade set ups

For my SPX strategy, I dedicated a $3,600 initial amount that will be used to trade SPX PCS strategy per week. If this amount is depleted, I will evaluate the strategy to determine whether to continue or change it. If I grow this amount, I will scale up the trading.

WHAT WILL WE TRADE?
DAY	DTE	TYPE
MONDAY	7 DTE	Put Credit Spread
TUESDAY	30 DTE	Put Credit Spread
WEDNESDAY	7 DTE	Put Credit Spread
FRIDAY	60 DTE	Put Credit Spread
EVERY MONTH	120 DTE	Put Debit Spread – HEDGE

Last week trading

DAY	SIGNAL TYPE	TRADE STATUS
MONDAY	Negative	No new trade
TUESDAY	Negative	No new trade
WEDNESDAY	Negative	No new trade
FRIDAY	Positive	New 60 DTE trade opened credit: $95 Exp: Mar18 (pm)
EVERY MONTH	—	No new trade opened

On Monday, our entry signal was negative and we stayed away from the market.

On Tuesday, our entry signal was negative and we stayed away from the market.

On Wednesday, our entry signal was negative and we stayed away from the market.

On Friday, the signal for the 60 DTE trade was positive and we opened a new 60 DTE credit spread.

We didn’t open any new 120 DTE debit hedging trade this week.

Here are our delayed open trades:

SPX PCS delayed trades

The trades are two weeks delayed. If you want to see the most recent trades or receive alerts, subscribe to our SPX alerts.

Overall, the strategy resulted in a -$595.00 loss last week. Note that the gain might be unrealized as some or all trades may be still open.

Initial account value (since inception: 12/07/2021):	$3,600.00
Last week beginning value:	$5,670.00
Last week ending value:	$5,075.00
The highest capital requirements to trade this strategy:	$8,975
Unrealized Gain:	$200 (+2.94%)
Realized Gain:	$1,275 (+18.75%)
Total Gain:	$1,475 (+21.69%)

SPX PCS account value

Our SPX net-liq dropped a bit last week but I expect it since the market is volatile and non-trending, well, it is trending but the trend is choppy and weak.

SPX PCS account vs SPX index net liq

However, comparing the account with SPX net-liq, we are still outperforming the market.

SPX PCS account vs SPX index

If the market continues being this choppy, I expect slower growth. I also plan on adding other trades to this strategy such as SPY trading. Also, the trading will be directional based on my proprietary indicators.

If you want to receive trade alerts whenever we open a new SPX put credit spread or a hedge trade, you can subscribe to our service:

SUBSCRIBE HERE

Note, if you wish to subscribe to multiple levels, you can do so by subscribing to one level only and then send us an email that you want to be added to other levels too.

Also, if you like this report, hit the like button so I know there is enough audience wanting to see this type of report. If you have any questions or want to see anything else about my SPX trading, do not hesitate to contact me or write a comment in the comments section. Thank you!

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Posted by Martin January 13, 2022
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My Goal 2022

I set up my investing and trading goal for 2022 and now is the time to write it down for the record. I plan on having the goal for 2022 simple and easy to track yet it may evolve over time.

2022 Goal summary

In 2022, I will focus on the following tasks:

Buying dividend growth stocks and monetizing those positions.
Developing SPX trading.
Developing and managing 15% of the portfolio in the HFEA strategy.
Increase Net-Liq value of the account by 30%
Maintaining 10% of the portfolio in tech growth stocks
Increasing exposure to SPY LEAPS and add one or two new contracts

Dividend growth stock purchasing goal

In 2022 I will continue purchasing dividend growth stocks as I did in 2021. But, I will also focus on adding high-yield dividend stocks and ETFs that are relatively safe. Here is the starting list of goals of stocks I plan on purchasing this year.

This goal is a developing task and it will morph over time and grow. It is not a rigid set of tasks. If I see a new opportunity, better than the one listed in the table above, I will shift my focus.

However, besides the dividend growth stocks, I will be buying high-yield dividend stocks such as RYLD, IEP, and QYLD (and may add other covered calls ETFs) for high yield. These stocks do not provide capital growth though but I will be purchasing them for income. I would like to create a dividend income that would offset my mortgage payments. And I am starting with HELOC to offset. That will give me peace of mind that I have cash and income saved that would help to pay my monthly payments.

The “BSV salary reserve goal” is a task that I wish to save enough cash in BSV to cover my annual salary, health insurance, taxes, etc. to be able to trade for a living. I am a conservative person, so I want to have enough savings in case the stock market pukes and I won’t be able to withdraw money from the account. In other words, I do not want to get caught with my pants down.

SPX PCS trading goal

In December 2021, I started trading SPX again using credit put spreads. I modified the strategy and now I use simple indicators to determine whether to trade PCS or stay away.

In 2022, I will be opening trades in the following days and if the indicators tell me that it is safe to open a trade:

Mondays (7 days to expiration)
Tuesdays (30 days to expiration)
Wednesdays (7 days to expiration)
Fridays (60 days to expiration)

And every month, I will be adding an SPX hedge for black swan events.

If the indicators are negative, we will skip the trade. I dedicated $3,600 for the SPX trading, currently, the account (sub-account) is at $5,370.00, an approximate growth of 47.33%. Although it may change over time my goal will be to increase this sub-account to $10,000 by EOY.

If you are interested, you can subscribe to SPX alerts and receive an alert via email or you can follow our Twitter for the alerts (in order to follow the Twitter account, you must be a subscriber).

Investing 15% in HFEA goal

HFEA is again a strategy (passive with quarterly rebalancing) that involves buying 3x leveraged ETFs and holding them for growth. Other investors who use this strategy reported up to 45% earnings in their accounts. I dedicated approx. $15,000 to this strategy (representing 15% of my portfolio). In December 2021, the HFEA account was up almost 10%. In January, thanks to the wobbling market, the account lost over 6% and the entire HFEA account is up about 2.4%.

There is not much I can do about this strategy. I just hold and in March (and following months) I will be rebalancing (either adding new cash to increase the account to 15% of my entire portfolio or trimming the holdings if above the 15% threshold. And, also, rebalancing ETFs within the HFEA account to keep the target allocation).

When trimming the HFEA I plan on saving the cash to dividend stocks or ETFs. When adding cash (during underperforming quarters) I will use the saved cash to increase the HFEA balance. I have not yet decided which stock or ETF I will use. I planned to use BSV but I may elect to use another stock or ETF.

Net-Liq value goal

I created a 10-year plan on growing my portfolio (all accounts together) and for 2021 my goal was to reach $42,344.06 net liq value. I calculated the initial balance and its increase based on estimated growth from options trading, stocks accumulation, stocks growth, and received dividends. The year 2021 was so exceptional that I exceeded that goal almost three times.

Well, I do not expect this to happen in 2022. But I did the same calculation as in 2021 and my new goal for the portfolio value is $151,638.03.

I still have goals from last year that are long-term:

6-year Portfolio Value Goal: achieve $175,000.00 net-liq value.

10-year Portfolio Value Goal: achieve $1,000,000.00 net-liq value.

These goals are well underway and if my portfolio growth keeps growing at the estimated pace, I should be able to achieve the 6-year goal next year in lieu of planned 2024 and the $1M goal may get accomplished at the end of year 9. Let’s see, how 2022 progresses.

Invest 10% in growth stocks goal

Although I primarily focus on dividend stocks, I also want to own a few tech stocks such as Apple (AAPL), Snowflake (SNOW), Amazon (AMZN), Tesla (TSLA), Google (GOOGL), etc. In 2022 I plan to invest in these stocks but keep my exp[osure to 10% of my entire portfolio, though. The ultimate goal will be to reach 100 shares of each to be able to sell covered calls.

Monetizing stock holdings goal

My goal with all my stock holdings is to reach 100 shares so I can start selling covered calls against these positions. I will be also selling strangles (and strive to cover them, to have enough cash to cover the put side, and own 100 shares to cover the call side. In 2021, trading strangles and covered calls was my biggest moneymaker. I will continue to do so in 2022 although at a slower pace.

At the top of this blog, I state “making 45% annually trading options against dividend growth stocks”. In 2021 I made over 62%. In 2022, I plan to achieve 30%.

LEAPS goal

In 2020 and 2021 I added SPY LEAPS contracts to my holdings. The 2020 LEAPS is my biggest gainer. It is unrealized gain, though I will be rolling the LEAPS further away at some point cashing my gains. In 2022 I plan on adding one or two more contracts of the SPY LEAPS to my portfolio.

That’s all for 2022. I will be reporting progress on this goal regularly:

Every week, I will report my overall portfolio progress and achievements the same way as I did last year.
I will also report my SPX sub-account progress every week.
Every month, I will report HFEA and Challenge account progress.

I would like to ask you if you could write me in the comments what you want to see in my reports or if you want to see them modified and how. Also, please hit the like button under this post so I know you liked the content and that you want to see more of it in the future. Thank you!

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Posted by Martin January 08, 2022
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2022 Week 01 investing and trading report

The new year 2022 hasn’t started very well as the FED released its meeting minutes that spooked the markets rushing away from tech stocks. As I will present in this investing and trading report our account lost 5% in the first week of the new year while the market lost only about 1.8%. But I am optimistic and once the market calms down, the account will be going up again. Why? Because although the account lost net-liq value, we still made over $3k in options trading and great dividend income! The value is depressed because of the violent panic in the market.

Here is our investing and trading report:

Account Value:	$98,730.94	-$5,913.70	-5.65%
Options trading results
Options Premiums Received:	$3,856.00
01 January 2022 Options:	$3,856.00	+3.91%
Options Premiums YTD:	$3,856.00	+3.91%
Dividend income results
Dividends Received:	$136.25
01 January 2022 Dividends:	$136.25
Dividends YTD:	$136.25
Portfolio metrics
Portfolio Yield:	4.63%
Portfolio Dividend Growth:	8.80%
Ann. Div Income & YOC in 10 yrs:	$24,305.74	20.09%
Ann. Div Income & YOC in 20 yrs:	$252,342.20	208.58%
Ann. Div Income & YOC in 25 yrs:	$1,417,526.31	1171.71%
Ann. Div Income & YOC in 30 yrs:	$14,049,264.41	11,612.94%
Portfolio Alpha:	-2.59%
Portfolio Weighted Beta:	0.61
CAGR:	548.29%
AROC:	3.91%
TROC:	14.70%
Our 2022 Goal
2022 Dividend Goal:	$4,800.00	2.84%	In Progress
2022 Portfolio Value Goal:	$151,638.03	65.11%	In Progress
6-year Portfolio Value Goal:	$175,000.00	56.42%	In Progress
10-year Portfolio Value Goal:	$1,000,000.00	9.87%	In Progress

Dividend Investing and Trading Report

Last week we have received $136.25 in dividends bringing January’s dividend income to $136.25.

We bought 20 shares of RYLD.

Here you can see our dividend income per stock holding:

Growth stocks Investing and Trading Report

Last week we didn’t buy any new positions in growth stocks.

Options Investing and Trading Report

Last week we rolled many strangle trades to keep our account safe. Each time the stock moved up or down towards one or the other strike price, it consumed our buying power. Rolling the trade to the center of our strangle, we brought in credit and released buying power.

These adjustments delivered our January income by $3,856.00 bringing January total to $3,856.00.

We were actively trading our SPX strategy that delivered $455.00 weekly income.

Expected Future Dividend Income

We have received $136.25 in dividends last week. Our portfolio currently yields 4.63% at $98,730.94 market value.

Our projected annual dividend income in 10 years is $24,305.74 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.

We are also set to receive a $4,838.36 annual dividend income. We are 19.91% of our 10 year goal of $24,305.74 dividend income.

Market value of our holdings

Our non-adjusted stock holdings market value decreased from $133,469.78 to $131,541.85 last week.

In 2022 we plan on accumulating dividend stocks, monetizing these positions, HFEA strategy, and SPX trading. We plan on raising more of our holdings to 100 shares so we can start selling covered calls. However, in the first week of January 2022, we couldn’t buy any new shares as the buying power was very volatile and we are raising cash (by letting old trades expire and not reopening them, or closing trades that are almost at a full profit but a long time to expiration – for example, trade has only five cents left but 30 or 40 days to expiration. It makes no sense to wait for $5 for another 30 to 40 days. So, we closed such trades).

Investing and trading ROI

Our options trading delivered a 3.91% monthly ROI in January 2022, totaling a 3.91% ROI YTD. We hope that in 2022 we exceed our 45% annual revenue selling options against dividend stocks target!

Our entire account is down -5.65% underperforming our projections and the market.

Our options trading averaged $3,856.00 per month this year. If this trend continues, we are on track to make $46,272.00 trading options in 2022. As of today, we have made $3,856.00 trading options.

Old SPX trades repair

We however traded our SPX put credit spread strategy which you will be able to review in my next report.

Market Outlook

The stock market struggled to break through the $4,800 resistance. It broke above it for a little while but then FED sparked a selloff and the entire market dropped below $4,720 support. However, it seems the selloff is exhausted and we may see some recovery. It is, however, too early to say. Next week can be a good indicator the where the market will go. In the short term, the market is negative and poised for a downturn. In a long term, we are still bullish. I still expect the market to reach $5,000 mark in the next month or two.