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Post by Del »

sweetandsour wrote: 13 Dec 2022, 10:14
Del wrote: 13 Dec 2022, 08:37
sweetandsour wrote: 13 Dec 2022, 07:51

The after hours trading really hacks me off, generally. Pre-market too sometimes.
Really? Don't take it personally.

Late market trading is often low-volume, so it doesn't tell us as much as regular trades. But sometimes the night trades tell us that something is happening in foreign markets (Europe, Asia) which will move the opening prices in America.

A lot of American economic news drops an hour before the markets open.

Our problem is that Mr. Market is bipolar and off his meds. The inflation news was good, and rational investors said BUY. The opening price gapped up nicely, and indexes traded up.

But 30 minutes into the trading day, the panicky investors started taking profits. At 10:30, Indexes are trading below opening.... but still higher than yesterday's close. All the same, I didn't expect to see a dark candle after this morning's opening.

Tomorrow (Wed).... Fed press conference in the afternoon. Expect some serious volatility in the late afternoon as investors jump on every comment. Hopefully the Fed will talk about easing up on interest rate hikes as inflation appears to be cooling.

XLE is holding it opening price gap (YAY!). Tech sector is leading today's drop.
"Gap and crap", the Fidelity guy says this morning. SPY has pretty much given everything back already this morning. We'll see tmorw if the Fed spoils any December rally, or "market Santa", traditionally the last week of the year + first two days of Jan.
There is a typical pattern: Gap up, close the gap over the next few days to test, then move up steadily. Also happens with gap down.

Today was a bit dramatic, but still typical. SPX dropped to test the bottom, and is working back up in afternoon trading.

Still, I didn't expect this. The gap was triggered by real news. I expected the market to digest the news and hold its gain. But Mr. Market is still nervous about what the Fed is going to say tomorrow. Bulls and bears are just staking their ground today. All of the crystal balls are murky.
What part of "HOC EST ENIM CORPUS MEUM" do you not understand?
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Post by Del »

I set up my condor last week. And mindful of the inflation/FED risk, I marked every day on my calendar with DON'T TOUCH IT! DON'T TOUCH IT! DON'T TOUCH IT!

But I saw the market this morning, and said to myself, "Market seems pretty happy with the inflation report. They must be confident that the Fed will react mildly tomorrow. Makes sense to me."

So I erased the warning and rolled up the puts for $370. Now I'm at risk of trouble if the market turns down tomorrow.

I'll never learn.
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Post by sweetandsour »

I'm seeing this morning that over $4 trillion of notional options expire today. I don't understand it completely, still, but this looks like a pretty big number. Over $2 trillion in SPX alone this morning.
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Post by Del »

I received my dividends on XLE today. $258
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Post by Del »

sweetandsour wrote: 16 Dec 2022, 06:33ping
Well.... what a year this has been. The S&P is down 20% for the year. My trading account is up 50%. That's a winning year, by any measure.

I've been trading for six years.... this is the first year that I have made a consistent profit. I will need another 12 months or so at the current rate to recover all that I have lost.

I want to thank you again for spending your time talking with me about trading. I just needed another real person to talk to about my mistakes. I didn't know that's what I needed, but now I can see it. Having a buddy to talk to has kicked me out out of a gambler's mentality and kept me accountable.

Because my account is still rather small, 50% means just under $12,000 profit for the year. Not enough to harvest and enjoy. My goal is to have an account that is large and profitable enough that I can harvest $52,000 per year ($1000 per week) to enjoy in retirement, with excess to continue growing the principal capital.

My account is currently at $35,000. I'll need to grow this to about $200,000 before I can start harvesting cash.

So... uh..... I have persuaded my wife to let me borrow $20,000 from home equity (cost 7.5%) to invest in my trading account (grows 30% - %50). I will draw from the trading account to make payments over three years.

In four years, it should be at $200,000. (Maybe sooner, if the position in XLE takes off.) I will be 66 years old, with an extra $50,000 per year of enjoyable cash to do whatever we want.
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Post by sweetandsour »

Del wrote: 31 Dec 2022, 22:07
sweetandsour wrote: 16 Dec 2022, 06:33ping
Well.... what a year this has been. The S&P is down 20% for the year. My trading account is up 50%. That's a winning year, by any measure.

I've been trading for six years.... this is the first year that I have made a consistent profit. I will need another 12 months or so at the current rate to recover all that I have lost.

I want to thank you again for spending your time talking with me about trading. I just needed another real person to talk to about my mistakes. I didn't know that's what I needed, but now I can see it. Having a buddy to talk to has kicked me out out of a gambler's mentality and kept me accountable.

Because my account is still rather small, 50% means just under $12,000 profit for the year. Not enough to harvest and enjoy. My goal is to have an account that is large and profitable enough that I can harvest $52,000 per year ($1000 per week) to enjoy in retirement, with excess to continue growing the principal capital.

My account is currently at $35,000. I'll need to grow this to about $200,000 before I can start harvesting cash.

So... uh..... I have persuaded my wife to let me borrow $20,000 from home equity (cost 7.5%) to invest in my trading account (grows 30% - %50). I will draw from the trading account to make payments over three years.

In four years, it should be at $200,000. (Maybe sooner, if the position in XLE takes off.) I will be 66 years old, with an extra $50,000 per year of enjoyable cash to do whatever we want.
Wow, man! Congrats on a great year, and a bold plan! Yes, it's great to have an ear to bounce things off, and you've indeed helped me as well with the charts, and encouragement to try options. I stayed in cash for most of December, buying a few shares of Conoco Phillips last week (at ~115) just to be invested rather than stay on the side. It will take options I believe, rather than day trading, to move my account in the right direction quicker.
Here's to us both, for a prosperous 2023!
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Post by Del »

sweetandsour wrote: 31 Dec 2022, 22:16 Wow, man! Congrats on a great year, and a bold plan! Yes, it's great to have an ear to bounce things off, and you've indeed helped me as well with the charts, and encouragement to try options. I stayed in cash for most of December, buying a few shares of Conoco Phillips last week (at ~115) just to be invested rather than stay on the side. It will take options I believe, rather than day trading, to move my account in the right direction quicker.
Here's to us both, for a prosperous 2023!
This is an extremely bold plan. I've spent several hours this holiday weekend, stress-testing to see if it is realistic and achievable. Turns out that I don't really need to be nimble or greedy. Just trade the condors and only make necessary adjustments to roll away from trouble.

I think I should do okay, even if we have another black swan event.

From the beginning, my dream goal was to have sufficient skill and capital to harvest a hefty allowance. Then I could really spoil my wife and grandkids (if God blesses us so), and be one of those guys who writes $20,000 checks for capital fund appeals.

But first, I have to achieve some milestones. Starting with $55k on Jan 1, the next major goalpost is an account balance of $75,000. (As I am drawing down every month to make the loan payments, this will be close to 50% return again. Ambitious.... but achievable with diligence, discipline, and a little help from Mr. Market.) I will do well to reach this by November.
======================================================

My primary strategy is gonna be weekly condors on RUT, plus month-long condors on SPX.

I also have 300 shares of XLE, and a couple of long June options (delta = 100). So I gain/lose $400 on every $1 move on XLE.

The options are underwater right now, but I'm hoping for XLE to get up over $100/share with this earnings season.
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Post by Del »

This article on 2022 performance by sector and stock.... Energy sticks out like a sore finger as the only sector to (wildly) outperform the rest of the market, and why it's still the hottest sector to buy and hold:

These 20 stocks were the biggest winners of 2022
Maybe you aren’t surprised to see that the energy sector was the only one to increase during 2022. But it might surprise you to see that despite the sector’s weighted price increase of 59%, its forward price-to-earnings ratio declined and remains very low relative to all other sectors.

The reason investors are still confident in energy stocks is that oil producers have remained cautious when it comes to capital spending. They don’t want to increase supply enough to cause prices to crash, as they did in the run-up to the summer of 2014, after which prices fell steadily through early 2016, causing bankruptcies and consolidation in the industry.

Now the oil companies are focusing on maintaining supply, raising dividends and buying back shares.
I am tempted to sell another put or two on XLE. We'll see how this first week of January develops.
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Post by Del »

First trading day of the New Year, and Mr. Market decided to punish me for holding XLE.

I'm glad that's out of the way.....
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Post by sweetandsour »

Del wrote: 03 Jan 2023, 13:03 First trading day of the New Year, and Mr. Market decided to punish me for holding XLE.

I'm glad that's out of the way.....
Hopefully, but we'll see. All of the oil stocks dropped, including Chevron, Exxon, and the ConocoPhillips that I bought at 116, (now at 113). Just hang on, and dollar cost average the good companies, as things get worse.
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