US Stocks My Trading Week (03.27.20)

in steemleo •  2 months ago 


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I had been trying to avoid trading but the price movement has been so wide in the high and low side that it was just to tempting to pass up. Although I made some trades I did my best to minimize risk by controlling my trade size. The smaller trades such as 10 contracts or less and a small amount of shares allow me to stay nimble if and when I needed to get out. Here is my log of what I went through in trades and observations of the markets.

A lot has happen over the week with the stock market and it had to do with current events and government and central banks interventions.

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A quick recap for the week. Since last week the SPY index had fallen 34% from all time highs and on Sunday evening it was hitting limit down in the futures. When trading began on Monday the SPY was in the red, but around 8:30AM the FED announced they were going to provide unlimited QE liquidity in bond purchases. Automatically the red was erased with solid green bars in a matter of minutes the ES futures moved up over 150 points. It had basically erased the overnight limit down and which was down 100 points from previous Friday's close. The mood for bearish bets was horrendous.

I first hand felt the pain as I was in some PUT contracts on the SPY. This was all before the 9:30 opening of trading so I was unable to get out of my PUTs when the swift bounce took place. I was fortunate to be in the green on the trade prior to Monday's open. When trading did open I immediately was trying to look for an exit. Any gains were better than no gains. The run up was likely short covering because within the first minutes of trading SPY was red again. I quickly took my profits and ran. As the session continue price continue to decline and closed near the lows of the day.

On Tuesday and Wednesday a bull rally began. Timing pretty well was someone I follow daily Sven Henrich at twitter handle https://twitter.com/NorthmanTrader

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By Thursday session close the SPY had risen 20% from its Monday's lows. From a technical term perspective the market had the shortest bear market as it only took one week for SPY to rise over 20% making it a new bull market. Week was not over yet as Friday trading began.


Out of the allure I was short at mid day of Thursday and although I avoided shorting during most of the 20% rise I still got trap in a losing position by end of Thursday as there was a quick end of the day squeeze on the bears. I was basically red for the week just on holding short on the squeeze.

https://www.zerohedge.com/markets/sp-futures-explode-40-points-higher-one-tick-7-billion-market-close-imbalance

In a matter of a minute I was only down a fraction of a percent when I was short the SPY via inverse ETF SPXU. A major drawback of holding inverse ETFs is they decay in price over the long run. So having to hold SPXU at a lost due to an unknown market imbalance that pull prices to the day's highs, basically frustrated. What happened in the after hours and continue on overnight was a slow but progressive drop. I felt fortunate this was happening as I was down for the week. As Friday trade open the trade I had on was in the green slightly and I took it. Within five minutes into the trading session I was out of my trade.


For me this week was a poor trading overall. I have been fortunate not have over trade and hence get trap either on the upside or the down side. Friday stocks started down but was recovering over the trading session, until it drop swiftly in the final hour of trading and SPY ended near the lows at close of trading. The potential for continuation of a drop for next Monday is now the prediction as after hours stocks continue to drop.

https://www.cnbc.com/2020/03/26/stock-market-futures-open-to-close-news.html

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