Our SPX trading started improving significantly. Our measures of opening box trades delivered enough credits in the past few weeks to offset trades that were deep in trouble. We could roll them down and use the credit to do so. Now, these trades are expiring out of the money, releasing buying power and allowing us to start opening new trades. Also, the markets seem to be calming down and no longer reacting violently to inflation, interest rates, or recession news. It still may change, but as of now, it seems the market has probably priced in these expectations.
 

Last week, we were adjusting our trades and these adjustments delivered -$2,715.00 loss. That brought our account down by -9.17% while SPX lost -1.00%. But, as I mentioned above, we collected enough credit in previous weeks that is is OK with me to close this week with a loss:
 

 

Overall, the SPX account is up +646.72% since the beginning of this program, and we have $30,875 in unrealized gains.

 

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 & 40 delta	10 wide Put Credit Spread
TUESDAY	30 DTE & 40 delta	10 wide Put Credit Spread
WEDNESDAY	7 DTE & 40 delta	10 wide Put Credit Spread
FRIDAY	60 DTE & 14 delta	10 wide Put Credit Spread
EVERY MONTH	120 DTE	Put Debit Spread – HEDGE

 

Our SPX strategy is designed as directional options trading. We are selling credit put spreads to collect premiums, and hopefully, these spreads expire worthlessly, or we repurchase them for a small debit.

We use a set of indicators (primarily based on moving averages) and market sentiment that generates bullish signals. The trading is based on a “trend following strategy.” We open the trade if we have a bullish signal and a bullish trend. If we do not have a signal, we stay away.

We set the set of rules and alerts and backtested them. The backtesting software proved that the strategy was viable and returned good gains. We also tried to automate the decision-making as much as possible to have the trading as mechanical as possible. This helps eliminate our emotions. The decision-making was reduced to: “bullish signal present” – open a trade, “not present” – stay away. It worked well.

Here you can see all our trades:

 

Click on the picture above to see the entire list.
 

We do not trade 0 DTE trades. This strategy is designed to be as passive as possible. You open a trade and let it run. You do not need to be glued to the computer all the time. The strategy takes advantage of the market’s historical behavior of mainly going up. Yes, there will be selloffs and corrections, even bear markets, but over time, it goes up. And therefore, our strategy is designed for this direction. The premise is that if we have a bullish trend, we open a bullish spread and let it run. 80% or 90% of the time, it will be a winning trade. And if the trend is strong, we open more aggressive trades (which is not the case today due to the market’s correction).

How much money can you trade?

As you can see in the table below, the highest amount of cash to trade this strategy is $19,995.00. That will allow adjustments, rolls, and comfortable trading without blowing your account. Can you trade less? Well, yes, I started with a $3,600 initial amount. But you need to be selective. You won’t trade all trades. You just trade the safest trades only (which is the Friday trade), especially in this market, and when the market gets out of this mess, you can start adding trades. And you do not compound. You must wait for the actual trade to end before opening a new trade. This way, the growth will be a lot slower, and you collect less credit, but you do not blow your account, mainly when you need to roll. You do not have money to do that (as the old busted trade will need more buying power which can be reduced by adding an offsetting trade that neutralizes the old trade, but you still will need that initial buying power).

 

Last week trading

 

Overall, the strategy resulted in a +646.72% gain last week.
 

Initial account value (since inception: 12/07/2021):	$3,600.00
Last week beginning value:	$29,596.95
Last week ending value:	$26,881.95 (-9.17%; total: +646.72%)
The highest capital requirements to trade this strategy:	$19,995
Current capital at risk:	-$875
Unrealized Gain:	$30,875 (-3,528.57%)
Realized Gain:	-$4,233 (483.77%)
Total Gain:	$26,642 (-3,044.80%)
Win Ratio:	58%
Average Winner:	$324
Average Loser:	$511

 

SPX PCS account value
 
Our SPX Net-Liq decreased last week. Our trading is still predominantly at a reduced mode and limited to just adjusting our existing trades, but we are slowly resuming regular trading.
 

SPX PCS account vs SPX index net liq
 
Our account is growing while the entire market is struggling, even though last week SPX grew faster than our account. I am looking forward to this selling to end and the market resuming its bullish uptrend. We will be able to get into the more aggressive trades and boost our income significantly.

 

SPX PCS account vs SPX index
 

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:

 

 

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!