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6.6% correction, is this the end or not?

Account Net-Liq: $7,143.75
SPX value: 3,444.02
Shiller PE: 31.58
 

Is this the end of the correction? Or just a bounce before we go back lower? If you look at today’s price action, the swing is spectacular. We have seen it in 2018 happening when the market crashed more than 2% and then ended where it started recovering more than 2%. We even have seen times when the market crashed more than 2% and recovered more than 2%, and added some! All in one day.

I have been trading for some time (since 1996) but do not recall times with such violent swings in such a short period of time. But I am old and my memory is failing me, I guess. Nevertheless, a few days long declines were typically followed by a few days long recoveries. In the past. Today, we have a one day bum, and the next day it is all gone. Just look at today’s trading chart:

 
SPX corrections
 

Of course, the price may change before I finish writing this however, I do not expect it. We have seen a two days long correction of a 6.6% and it seems, it will be all gone today. We may not necessarily end in the green today, but next week everything will be forgotten.
 

SPX 6.6% correction
 

Yesterday, I was frustrated over this price action as it was ruining my SPX trade repair efforts and now it looks like, I will be back on track fixing my early mistakes. If we start rallying again next week, I may be back in trouble on the call side.

As a reminder, last few years, I tried to actively trade SPX options, zero DTE trades, Iron Condors and strangles. I ruined my accounts. I tried to push it. I tried to study how to trade these trades and be successful. I never made it. And, I am officially admitting, that I was wrong, and maybe not as gifted as others who trade these trades successfully. I may have been undercapitalized for these types of trades or not glued to the computer monitor long enough, or not able to adjust fast enough, or whatever I was doing wrong, I never figured out how to fix a bad trade without losing money. Today, I have a few bad trades I drag around. I keep rolling them to get them into expiration without large losses and use other trades to generate income to pay for these repairs. It works so far, but in a market like this, it can be very frustrating. And, when I am done with these repairs, I will not trade these trades anymore. I am going back to my original strategy from 1996 – 2014 which worked but it was not a quick-rich scheme trading I wanted.

What to do today? Buy the dip. Because it is all it was. A great opportunity to enter into positions you may have liquidated a long time ago. Or establish new ones. Next week will be bullish again.

 
 

If you are interested to see what stocks and what options we trade, then join us at MeWe. We no longer participate at Facebook (very little though) but we are active at MeWe.





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