Stock Trading

[sweetandsour]

Inflation news today.... not great.

Market is looking to establish a new low for the year.

Breached the June low this morning.

[Del]

Inflation news today.... not great.

Market is looking to establish a new low for the year.

Breached the June low this morning.

Opened with a new record low -- and then surged with great exuberance this morning.

I'm scanning the market news. Everyone is stabbing at trying to figure out why the market is so optimistic.... they are trying, but no one seems to have a clue. Every sector is moving, but our XLE energy sector seems to be leading the way.

Here's typical article from a few minutes ago:
https://www.cnbc.com/2022/10/12/stock-f ... -data.html

Investors may be betting that the stronger-than-expected inflation report means price increases will peak soon.

“We get this last gasp higher in inflation and from here we start to decelerate,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. She added, however, that swings in stocks are likely to continue as investors digest more inflation data and earnings season kicks off.

In other words, "This bad news must mean that good news is just around the corner!" Yeah, sure.... And Lucy certainly won't pull the football away this time, Charlie Brown.

But I agree with Little Miss Schwab Expert that we are looking at crazy volatility as earnings season kicks off.
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Oil prices are going up, which explains our energy sector surging. If there has to be inflation due to rising energy prices, then we are glad to be invested in the sector which profits from energy prices going up.

[Jocose]

[Del]

I'm loving jocose's contributions to this thread.


The Federal Reserve does not have enough raw power to control inflation as long as Biden's energy policies maintain a death-strangle grip on our GDP's testicles.

The only thing the Fed can do is shrink our economy to match our artificial poverty. Tight money, recession, and high unemployment are a price we must accept to postpone collapse until the fascist dictator can be removed.

This sucks for most people. The very rich will find/create opportunities to further enrich themselves in this environment. Our goal, as little hobby stock traders, is to manage a little gain from the pain.
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In late August, I moved $428k of my retirement portfolio from SP500 index to an energy sector index. Since then, the broad index has dropped $50k (-11%). The energy index is UP $5500 (+1.3%). The net difference is +$55k, or about a year's worth of retirement draw. I have added a year to my retirement fund's lifespan.

[sweetandsour]

I'm loving jocose's contributions to this thread.


The Federal Reserve does not have enough raw power to control inflation as long as Biden's energy policies maintain a death-strangle grip on our GDP's testicles.

The only thing the Fed can do is shrink our economy to match our artificial poverty. Tight money, recession, and high unemployment are a price we must accept to postpone collapse until the fascist dictator can be removed.

This sucks for most people. The very rich will find/create opportunities to further enrich themselves in this environment. Our goal, as little hobby stock traders, is to manage a little gain from the pain.
===========================================

In late August, I moved $428k of my retirement portfolio from SP500 index to an energy sector index. Since then, the broad index has dropped $50k (-11%). The energy index is UP $5500 (+1.3%). The net difference is +$55k, or about a year's worth of retirement draw. I have added a year to my retirement fund's lifespan.

Wow, congrats on that move! It was a good move, and not a risky one either. If you have XLE it pays a good dividend as well.

I've been dollar cost averaging SPY as it dropped, until I depleted the funds in my play account, even selling my XLE after it paid the dividend last month, in order to use those funds for additional SPY. So, I was spent when it hit bottom this morning anyway, so I left the house for the day to be my wife's driver and keep her company on some errands. (This morning's golf was cancelled due to lightning.) I didn't even look at the market until late afternoon. There are some traders that did pretty well today.

These times sort of (but not exactly) remind me of the early 80s, ca. '81, e.g., when Reagan took office. Inflation rate 13.5%, prime rate 21%, recession, 10% unemployment. I was in my mid 20s, married with 3 children, and the refinery where I was employed was reducing staff. I remember an older co-worker telling me "this had to happen". The Lord watched out for me and my family, and took care of us back then. Back then I was just holding on. Now, I'm just trying to grow my account so I can pay my taxes.

[sweetandsour]

Missed opportunity. I should have sold my SPY yesterday afternoon and bought it back this morning.

[Del]

Missed opportunity. I should have sold my SPY yesterday afternoon and bought it back this morning.

Remember this.

When Mr. Market goes on a bender to drown some bad news, he wakes up with a hangover.

I figured chances were high that the market would pull back this morning, but I didn't place any positions on it.

The pull-back benefits my current positions. At 11:30, RUT has moved back to the center of my condor that expires next Wednesday, a safe and comfortable position.

I have a call on XLE at 83 which expires next Friday. I'll be okay if it gets called out, but I'd prefer that it not. XLE closed above 83 yesterday, but it's down to 81 now.

[Del]

ping

I am giving up on copper. We are entering a global recession (thanks, Brandon). Building and construction have come to a complete halt. There is little upside. I decided to sell as it comes off of yesterday's surge.

I have a clever trick for leaving a buy-&-hold position. Instead of selling at market price, I sell an in-the-money call.

My copper ETF is CPER. I entered back in May. I have been buying more as it fell, and selling covered calls. My overall basis is $22.31 on 600 shares, or $13,400. Too large a position for my account.

I decided to sell as it was trading at 20.63 -- $12,400, a loss of $1000. Ouch.

So I didn't sell today. Instead, I SOLD CALLS AT STRIKE $20 FOR $712 (Nov. 18).

That's $1.19 per option + $20 strike per share = $21.19, is my actual sale price -- today, right now, as it was trading at $20.63. On 600 shares, that's an additional $336 on the sale.

I am still selling at a loss. But it's not $1000 loss. It's $677 loss. That feels a whole lot better.

If CPER goes up -- I don't care. I have already sold it.

If CPER is trading below $20 on Nov 18.... then I get to keep the premium for the calls. My new basis will $21.13 (down from 22.31 above). And I can sell more covered calls to reduce my basis even further.

There is strong support at 20.30, so I expect to be called out as planned. The deal is set; time to forget about it.

[sweetandsour]

I sold some SPY yesterday when it spiked up to 375. I had what the analysts were calling a weak hand, and apparently I wasn't the only one. The so-called overhead held the price at 374. Today it'll be interesting; futures are showing a drop. The question will be where to get back in.

[Del]

I sold some SPY yesterday when it spiked up to 375. I had what the analysts were calling a weak hand, and apparently I wasn't the only one. The so-called overhead held the price at 374. Today it'll be interesting; futures are showing a drop. The question will be where to get back in.

What is a "weak hand"? What is this "overhead"? Not familiar with those terms.
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I wouldn't dare to guess direction or price levels. My only prediction is that there will be a LOT of volatility through October.

- It's Earnings season. Fresh news every day. Lots of attention on forward projections for revenue and profit.
- We are at the bottom (or false bottom) of a bear market (the most volatile of market environments).
- GDP and unemployment news are due next week, affecting future Fed rate decisions.
- Guessing at election outcomes and what opportunities can be found.

I guess I'm hedged all over the place. I've got something that will benefit me if the market goes up, or down, or can't find a direction.

My condor on RUT expires today (Wednesday). It's sailing down the middle of the channel this morning, so I'm very pleased. My stat-teller says there's just 15% chance of trouble right now. The chart says "don't worry." I have $6000 at risk; I received $1200 in premium. 20% return in 10 days, when it works.

I already have a condor position on next Wednesday. $530 premium on $3000 at risk (18%). Stat-teller says 10% chance of trouble this week.

My covered call on XLE expires this Friday. Strike at $83. It is trading just above 83 right now, so we'll see if it pulls back a bit by Friday. I like XLE, so I may just have to buy it back. I'm confident I could get it at 83 or less sometime next week.

I want to increase my position in XLE, so I sold a put last week -- expires next Friday, Oct. 28. I promised to buy 100 shares at 81. Received $200 in premium ($2 per share). So if the price is under $81 next Friday, I will have purchased at net basis $79 (81 - 2 = 79). If the price is above 81, then I will pocket the $200 and sell another put.

It is a sound strategy to sell puts on positions that you want to accumulate. That's how Warren Buffet does it. Get paid for buying low! Or get paid for not buying at all!

Remember CPER? I sold a call ITM at strike 20. I'm kinda hoping it gets called out. The ETF is trading just above 20 now. There seems to be strong support at 20. The call doesn't expire until Nov 18, so we'll see. Meanwhile, it has been fun watching the price drop and not having to worry about it. I already sold that gap!

A few weeks ago, I told you that I was struggling to get my chin above $30,000 in my trading account. Cash from my condors was being offset by losses on my holdings in copper and XLE.... and I kept stepping on the rake with some bad condor trades.

Today, my account is at $32,500. (I've seen $33,000 before, so this isn't new territory.) I'm keeping my positions small and my condors wide, just trying to stay out of trouble. I'd like to achieve $35,000 by year's end, but I can't get there by taking aggressive positions.

Meanwhile the market appears to be at a local bottom. My long positions might start to pay off.... or I might have to wait a few years for the recession to pass and another election.

I turn 62 next week. I'm not too old to invest in green bananas!