Is the bull back? Early report

I’m traveling the next two weeks, so am posting an early report. Grade incomplete. May is banner month for the bulls. NVDA went from my biggest losing ticker for 2025 to the biggest winner. MSFT continues to be on the loser list because some calls I sold had to covered for a big loss on a gap up. NVDA's recent strength caused a smaller loss, covering sold calls.

One commentator from IBD on YouTube is super bullish. Take it with a grain of salt, of course, but the guy has 40 years in the market and sees a parallel to the 1998 Internet bull boom. That ended badly in 2000, but there were two years when fortunes were made.

The IBD methodology is CANSLIM, a momentum centered strategy that tries to ride big up moves. This home run mentality is something I am weak at.

I’ve have a position in NVDA shares. I started buying around 30, and it is now 140+. That’s one of the very few home runs I’ve had in non-index shares. With the benefit of hindsight, someone trading the ups and downs could have made much more than 4x, but for me, that’s a big hit.

Here is an ETF recap:

GLD gold 26.0%
SLV silver 24.2%

EEM emerging mkt 12.2%
SPY SP500 2.3%
QQQ Nasdaq 100 3.7%

TLT US20 yr -2.3%
IWM Russell 2000 -4.1%

My trading account +2.7% for calendar 2025. Not great, but I’ll take it. The sobering comparison is to T-bills which might be +1.7% with no work, no risk, no draw downs. I might a market chicken, but I am not in turtle mode.

I feel like I haven’t done much right in 2025. An analogy might a be a baseball pitcher that doesn’t have their best stuff that day, but does enough.

For those traveling, have a aafe and fun trip. Cheers.

Another V-shaped recovery, Grade C-

Stock market moves almost straight after a brief bear market. I feel like my trading is below average, because I am now slightly behind SPY and QQQ for 2025. Grade C-

I did some put debit spreads to hedge a bit. Both hedges expired worthless, costing me about 0.9% of the portfolio. MSFT rocketed higher on earnings and I covered some sold calls for a huge percentage loss. Those factors contribute to me now trailing the indexes.

It demonstrates why and how hedging is difficult. I paid 0.9% for a minor hedge for about two months, which basically turned into drag. Of course if I knew we would recover from the bear lows so quickly, I wouldn’t need to hedge. I can find some comfort in staying mostly long. Having the hedge gave me confidence to keep my other longs.

Here are a few ETFs year-to-date:

GLD gold 21.5%
SLV silver 11.3%
EEM emerging mkt 10.6%

QQQ Nasdaq 100 2.0%
SPY SP500 1.4%

TLT US20 yr -1.2%
IWM Russell 2000 -5.0%

My trading account up 1.1%, so I am slightly behind. I am going to be traveling next month, so trading may be limited. The market continues to be treacherous. United Healthcare was a super blue chip a couple months ago. UNH lost over half its value in a few months. That’s why diversification and risk management is vital for those with a decent account size.

Is it all puppies and rainbows now? Seems unlikely, but the 2025 lows are likely good support if we see another leg down. Still a lot of public chatter about risk in the market, and it is risky. This is not a low risk time to be all-in long. So my default is back to being net long, delta hedging.

Simplest example is to own 5 shares SPY, sell a 3 delta call. The tiny premium doesn’t cushion much downside, and if the market rips higher, some upside might be lost.

Not in Kansas anymore, Grade C+

The bear has appeared. Market feels different. The leaders of recent memory are faltering. Subject line refers to the movie, The Wizard of Oz, when Dorothy gets picked up by a tornado. When she gathers herself, Dorothy says “we’re not in Kansas anymore” because we are officially in bear market territory. 

The average duration for bear markets for the past 50 years, is nine months (bulls tend to last 18 months). So if we get an average bear market, it is October before the bull resumes. If this turns out to be Ursa Major, any rallies will be selling opportunities.

Long time readers know that I am a slow moving trader. The choppy market has been good to the quick and nimble. I have been doing a few trades, but mostly rearranging deck chairs (vs making major moves). Being a chicken has limited the losses, though I am still down 6.1% for the year.

Here are a few ETFs for comparison:

GLD gold 26.4%
SLV silver 13.7%

TLT US20 yr 0.2%
EEM EmergingMkt 0.2%

SPY SP500 -10.2%
QQQ Nasdaq100 -13.1%
IWM Russell2000 -15.6%

Again I am -6.1% for 2025, which isn't great, but better than buy and hold. I dodged a couple of bullets by being so cautious. What now? The SP500 heat map is a useful tool for potentially finding new leaders if and when the bull resumes. Obviously, it is just a tool. United Healthcare UNH was a 2025 leader until it reported disappointing earnings.

For those that would like a watch list: BRKB, CRWD, NFLX, MCK. Better is to go look at the heat map yourself and look at various time frames. Unfortunately, many of even the SP500 stocks have poor option liquidity, so shares might be the way to go.

I am still holding substantial share positions in AMZN, NVDA, QQQ, BRKB. Berkshire is the only winner so far. BRKB has a substantial cash position, large positions in various insurance companies, AAPL, and the railroad.

My plan coming into 2025 was to use some of my cash reserves to buy dips. However, the map looks different today. In January 2025, the Reddit option sub was full of people reporting aggressive monthly and yearly profits, full of confident bulls loaded up with leap calls on NVDA and similar. Captain Obvious will tell you anyone with leap calls on major tech stocks is down a huge percentage.

More recently on Reddit, there are many reports of catastrophic account losses. I have often warned about the financial Russian roulette that many aggressive option traders were playing. For some, there number came up. For those with substantial accounts (more than ten years worth of savings), it is difficult to overcome huge drawdowns.

Happy Easter to all who celebrate. Be thankful, be faithful. Bible verse Micah 6:5, Act justly, love mercy, and walk humbly with God.

Correction territory, Grade C+

Both SPY and QQQ now down more than 10% from record highs, means we are in a market correction. We will see if the market goes to -20% for an official bear market. Lots of predictions, but of course no one knows for sure. I mostly do nothing, sell a few way out of the money calls. Add an odd share or two. Still keep a healthy cash reserve.

Here are a few ETFs year-to-date:

GLD gold 15.0%
SLV silver 14.0%

EEM emerging mkt 6.6%
TLT US20 yr 3.9%

SPY SP500 -3.8%
QQQ Nasdaq 100 -5.9%
IWM Russell 2000 -7.8%

My trading accout -1.3%, so better than the market indexes. This is expected for an account with large cash reserves.

Warren Buffett often talks about waiting for your pitch. In the stock market, a person can wait indefinitely. There are no called strikes. Yes, there may be missed opportunities. My only significant winning ticker in 2025 is BRKB. A few other odds and ends are slightly positive. NVDA, QQQ, AMZN lead the parade of losers.

Precious metals and foreign markets are doing well. I see these are more rotational plays than big secular moves. Staying close to shore, waiting for better sailing weather is my current course. If the indexes touch -20% off their highs, I may deploy some of the cash reserves. 

Good while it lasts Grade C

Record highs on Wednesday followed by a two day tumble to end the option cycle. I do okay, but am now lagging SPY for calendar 2025. 

Here are a few ETFs year to date for 2025:

GLD gold  11.8%
EEM emerging mkt 7.4%
SLV silver  4.9%

QQQ Nasdaq 100 2.9%
SPY SP500 2.4%

TLT US20 yr -0.8%
IWM Russell 2000 -1.4%

My account +2.1% so slightly behind. I remain overweight mega-cap tech, while maintaining a healthy reserve. So far, it hasn’t been that good. I haven’t taken advantage of the bull moves in GLD, EEM, SLV which are leading the pack so far.

Not much is compelling. WMT took a tumble after running higher. Same story in quite a few stocks. I devote much of my recent time to songwriting.

Off topic, I participate in February Album Writing Month. The music side of the blog has the five song EP and the B-side with nine other songs and song sketches.

Here is the music side of the blog:

https://sandtigerpiano.blogspot.com/

My Youttube Channel

https://www.youtube.com/@billchin-bw4zz

Kids Rollercoaster Grade C

 The stock market year moves higher, then lower, then higher. Reminds me of a kids rollercoaster. The moves weren’t huge, but a few people go shaken out on the down move.

Here are some ETF year-to-date for 2025:

SLV silver 4.9%
GLD gold 2.9%

QQQ Nasdaq 100 2.1%
IWM Russell 2000 2.0%
SPY SP500 2.0%

EEM emerging mkt 0.6%
TLT US20 yr -0.2%

My trading account +1.6%, so I am lagging. Given my near standing start with heavy cash reserves, this is not a surprise. Self-grade is C. It’s okay to make below market returns, with below market risk. Most years this is expected. In 2024, I had a minor win over the market averages by being overweight in big cap tech.

It remains to be seen if the old leaders will continue, or will new leaders emerge, or perhaps the rollercoaster goes on for larger peaks and valleys. The four year presidential cycle, looks for a minor dip in February, and minor top in June. We will see if this kind of Farmer’s Almanac forecast is any where close.

Prayers for all those experiencing losses or difficulties from the devastating fires in Southern California.

Year in review Grade B, and the Buffett indicator

 Time for a year end wrap up. It was a bull year for sure, despite a little weakness here near the end.

Here are a few ETFs for 2024, not factoring in dividends:

26.7% GLD gold
24.8% QQQ Nasdaq 100

23.3% SPY S&P500
20.9% SLV silver

10.1% IWM Russell 2000
4.0% EEM emerging mkt

-11.7% TLT US20 yr

My trading account +25.2%. A solid B grade. I have significant positions in NVDA, BRK.B, AMZN, SPY and QQQ. A do have a few scattered shares in quite a few other stocks. Only losing ticker symbols for the year are TM Toyota, and TLT 20 year treasuries. Big winners in the stocks listed up front, NVDA, BRK.B, AMZN, SPY, QQQ.

I had a couple of big percentage winners on vertical call debit spreads on NVDA. Mostly, it was small potato, selling of puts and calls way out of the money. A couple of rallies were strong enough for me to roll the calls up and out.

Didn’t do anything brilliant. Last year I sold my few shares of PLTR Palintir, never bought back in. I sold my few shares in TSLA near the 52 week lows, but did buy back in.

Predictions are for entertainment, my prediction is +6% for SPY in 2025. There will be trading swings, but I don’t expect anything overly dramatic. If we get 10% off the highs, I will add longs, and add more if we touch -20% (which I don’t think we will see). On the up side, if we get to +20% for the year at any point, I may reduce positions and/or sell higher delta calls than I usually might.

Worth mentioning is the the US GDP vs total market cap indicator, sometimes called the Buffett indicator. What this doesn’t factor in, is how global many companies are now in terms of sales and profits. Anyway, the Buffett indicator is on a sell signal, with stock market valuations way out pacing GDP growth.

It’s been a good year for bulls. I hope it’s been good for you. If not, like the NY Mets baseball team, wait until next year. Cheers.