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2022 SPX put credit spreads trading review – week 11

The stock market staged a three days rally when SPX reached 200-day MA at $4,468 level. Is this a reversal or just a violent relief bounce rally before we reverse down again? I think, what we are seeing is a reversal. The FED finally raised the interest rates (and if you are subscribed to my newsletter, I was saying for a while that this can be a strong bullish event), so this fear is behind us. Now we only face a fear of the war in Ukraine but that is also becoming old news and investor will start ignoring it soon. So, this can be a trend reversal.

Unfortunately, I opened a trade that ended up a costly mistake. I had to roll the trade on Friday and take a loss on it without having a chance to offset it. I guess I will have a chance to offset the costs later and hopefully next week.

Last week,the SPX PCS strategy finished down by -17.50% while SPX was up 6.16%. Our overall SPX account is up +90.47% since the beginning of this program. However, we still have -$3,055 in unrealized losses. At some point we will have to work hard to offset those losses.
 

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

 

In the past few weeks, we opened a few call spreads to offset the losses on the put rolls. Now, with this strong 6% rally, these calls are hurting us. In order to make money, we need steady growth, not the crazy moves we witnessed recently. But, it will stabilize.

Overall, the strategy resulted in a -$1,455.00 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: $8,311.95
Last week ending value: $6,856.95 (-17.50%; total: +90.47%)
The highest capital requirements to trade this strategy: $19,160
Unrealized Gain: -$3,055 (-18.54%)
Realized Gain: $6,197 (+37.60%)
Total Gain: $3,142 (+19.07%)

 

SPX PCS account value
SPX PCS account value
 
Our SPX net-liq dropped last week. If the market is back to normal (hope) then I expect this to be a temporary loss and the account will grow again.
 

SPX PCS account vs SPX
SPX PCS account vs SPX index net liq
 
However, comparing the account with SPX net-liq, we are still outperforming this horrible market.
 

SPX PCS account vs SPX
SPX PCS account vs SPX index
 

We need to wait for the next week to see if the bottom has happened or more pain is coming. If this horrible market is at the end and a new rally is coming, our strategy will perform great. Our trading signals are all positive (strong positive) so unless we see some catastrophic decline next week, we should perform great from now on.

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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