Late report, grade incomplete

Sorry for the late report, I lost track of the weeks during these dog days of summer. I hope all are having a decent summer. I only did a few trades, none that really stood out. I did sell my tiny position in ASAN just before it doubled. Still have tiny share positions in PLTR SKLZ, that I overwrite calls on (eg: own five shares, sell delta 0.05 calls against that, need full account authorization).

Right after the third week expiration, the market had a sharp one day dip, but that was all. A brief summer thunderstorm, then back to good weather.

Dip at the End, Grade B-

Markets drift up and down, with a hard down day on expiration Friday. Self-grade is B-. I eek out a small gain, as SPY is flat for the trading month. The minor surprises are strength in bonds, weakness in precious metals. With all the inflation talk in the air, the opposite might be expected.

Here are a few etfs, year-to-date, no dividends

IWM Russell 2000 13.3%
SPY SP500 11.0%
QQQ Nasdaq 100 9.2%

EEM emerging market 5.0%
SLV silver -2.8%

TLT US20 yr treasury -7.6%
GLD gold -7.5%

My account +7.1% for calendar 2021, which lags all major US stock indexes, but is still a decent number for half a year. I make minor forays into CAKE and TXRH, which so far are both losers. I sold my tiny position in ASAN, just before it popped.

Which way from here? I see way too much chatter online about an impending crash to believe that this downturn has much steam. The mantra that has worked for 12 years may still be in effect, buy the dip. As always, my predictions are no better than coin flips.

May Gray, Grade C+

In Southern California, the weather during May is often described as May Gray, because of a morning overcast most days. The stock market advance falters. The QQQ gave up a good chunk of its 2021 gains. SPY still holding on. GLD advanced. I eek out a tiny gain, grade C+. 

I’ve been doing more over writes, buying a few shares, selling way out of the money call to get close to delta neutral. More than a few stocks came out with stellar earnings then flopped. AAPL AMZN FB were some that I did the over writes with. I took a loss in WDC. I took profits in ASAN, which I have had since its first trading day. I still have a tiny position in PLTR. 

Some ETFs year-to-date, best to worst

IWM Russell 2000 12.2%
SPY SP500 11.0%
QQQ Nasdaq 100 4.2%

SLV silver 3.9%
EEM emerging market 2.8%

GLD gold -1.3%
TLT US20 yr treasury -12.7%

My account up 6.3%, so I have moved ahead of QQQ for the year, but still lag SPY. Again, after my 2020 debacle (margin call and -67% drawdown), the new normal for me, is less overall risk, more overall cash.

Here is Southern California, May gray is often followed by June gloom. Will the stock market come out of its funk? Or will a real storm develop? Or will it be blue skies? As always, my predictions are no better than coin flips. My money is made by managing risk.

More Bull, Grade C

I make modest gains as the bull roars ahead. I briefly went net short QQQ. That was a mistake, but I quickly went back to net long. As has often been the case, I lag behind the roaring bull market. 

Here are some etfs, year-to-date:

IWM Russell 2000 14.6%
SPY SP500         11.6%
QQQ Nasdaq 100 9.0%

EEM emerging market +5.2%
SLV silver                 -2.0%

GLD gold                 -6.7%
TLT US20 yr treasury -11.7%

My trading account +6.1%. Normally +6% for four months would be pretty good, but all the major US stock indices are up more than that. Still, after the beating I took in 2020, any gain might be considered a good gain.

Treading water as QQQ corrects, Grade B

SPY held steady for this month, but QQQ corrected. I eek out a tiny gain, on reduced trading activity. Perhaps that is the new normal for my account, as this is the third report in a row with similar comments. Self-grade is B for the tiny gain.

I closed on sold puts on WMT and COST near their respective bottoms, but overall held my small positions during the shallow correction. QQQ is now down for the year.

There are swarms of newbies in the markets. This is usually a bad sign for bulls. A reminder that the news and outlook often look the rosiest at the top. Again, it is a very low percentage game picking tops, so I don’t try. However, I have been around long enough to be extra careful when the little fish are jumping into the pool.

Many of the new people are being “taught” by the one-year veterans, who are teaching them to buy every dip. What could go wrong?

Anyway, enough cynicism, here are ytd etfs:

IWM Russell 2000 15.8%

SPY SP500         4.2%

EEM emerging market 4.7%

QQQ Nasdaq 100         -0.2%

SLV silver         -1.1%

GLD gold         -8.5%

TLT US20 yr treasury -14.6%

My account up 3.2% for calendar 2021, up 0.2% of the month. Yeah, I know, sleepy times. However, after the beating (-42%) I took in 2020, I am even more cautious. Again, that might be my new normal.

Still staying small, Grade B-

I stay small, with reduced trading activity. I am up 3.0% for the period, slightly lagging SPY which gained 4.3%. Self grade is B-.

2021 Year to Date:

IWM Russell 2000 14.9%
EEM emerging market 11.3%

QQQ Nasdaq 100 5.5%
SPY SP500 4.3%

SLV silver 2.8%
GLD gold -6.4%
TLT US20 yr treasury -9.2%

A lot of market news was from Reddit. I am active on the options sub as Rtiger. I played some of the meme stocks in a tiny way. Sold GME Feb 10 puts when the stock was moving up through 300. Trading restrictions made for a bumpy ride for the tiny profit. I have tiny positions in PLTR and ASAN. Just enough to keep me following them, not enough to make meaningful profits or losses.

I am too slow moving to be on the bleeding edge of what is new. I remain cautious, looking for better opportunities.

Small gains, reduced activity B- grade

I start the year cautiously, with small positions, few trades. Self-grade is B-. After the shellacking I took in 2020, I remain gun shy. My trading account is up 0.4% for calendar 2021. SPY up 0.5%, but QQQ down at this point. The bigger story might be the corrections in gold and silver, down substantially from their highs.

Here is the ETF scoreboard for 2021 so far:

EEM emerging market 5.2%
SPY SP500 0.5%
TLT US20 yr treasury 0.1%

IWM Russell 2000 0.0%
QQQ Nasdaq 100 -0.6%

GLD gold -4.1%
SLV silver -6.6%

Here’s to a better year for all.

2020 The good, the bad and the ugly

I posted the following to the Reddit options sub >>

Time for a year in review. For me the emphasis is on ugly.

After a 67 percent drawdown and a margin call in March, I end up with a 37 percent loss for 2020. No need to say I told you so, for those so tempted.

A near perfect storm of an accelerating decline with some sharp rallies, my big ego from a 55 percent gain in 2019, and being sick with the flu, led to some bad decisions.

I had at least 50 percent buying power available when the downside started. That gets chewed up real quick on portfolio margin. I was faked out by many of the rally attempts. Obviously, I was over exposed to a sharp decline.

When the margin call came, I moved most of what I had left to cash and regrouped. Overall I see myself as a cautious trader. I'm sure more than a few were wiped out and most of them tell no tales.

The good is that I got off the mat, up over 40 percent from the account lows. The bad is that a 200 percent gain is needed after losing two thirds of the account.

The good is that I have other accounts, that are way more conservative.

I've gotten better about looking at the task at hand. The day, the hour, the moment directly ahead. My predictions are no better than coin flips, so I'll skip those.

My rule number one is

Live to trade another day

This past year, I survived and hopefully am wiser for the experience. Happy new year to all.

Gentleman’s C aka 2020 s*cks -37% for the year

I inch ahead this month. Up about 2% which trails the gains in most indexes. I am busy with other things besides trading. For the year, still down a brutal 37%. On a popular financial website the picture captures it for me “2020 s*cks”

The ETF score board

SLV 49.4% silver
QQQ 45.8% Nasdaq100

GLD 23.5% gold
IWM 17.7% US small cap

TLT 15.4% US 20 year treasuries
SPY 14.7% US large cap
EEM 13.7% Emerging market stocks

Again, my trading account down 37% due to the drawdown that led to a margin call in March. Silver leaps into the lead for 2020. That’s it for now. Merry Christmas to all.

Oops late report B-

Oops, I lost track of time and forgot to post a report last Saturday. I was busy with other things, and feeling a bit under the weather. 

Overall a decent month for the markets and me. I was up about 4%, still down 38% or so for calendar 2020. Again, the steep drop in March caused a margin call and I went mostly to cash near the lows. It is a steep up hill climb after a 66% drawdown.

That's it for now. Hopefully, more time for blogging and trading will appear soon.

Markets move higher Grade C-

Most market indices moved higher for this option cycle. SPY up over 5%, QQQ up nearly 8%. My account up a lagging 2%, grade C-. A gain is a gain, but when the market is moving solidly higher it feels better to participate. My overall caution is what cost me this month.

Here are the year to date numbers:

SLV 39.8% silver
QQQ 35.7% Nasdaq100 mostly tech

GLD 24.8% gold
TLT 19.1% US 20 year Treasury

SPY 7.9% US S&P500 Large cap
EEM 1.5% emerging markets
IWM -2.2% Russell 2000 US small cap

The surprise might be the huge gains in silver and the Nasdaq. Again, I am still in the -40% range for the year, because of the margin call in March.

It feels like a lifetime ago, when the markets were down 30% for the year. I feel some post-traumatic-stress from the events. Anytime the markets take a tiny dip, part of me wonders if this is another big one. Now, I have gotten back in, and am making trades, but have more cash than I used to.

This makes sense, after a severe drawdown and margin call, no one wants to repeat that experience.

Treading water, Grade B-

My account treads water, basically break even for the month. Self-grade is B-, as there were some opportunities to make or lose money. For this option cycle, SPY moved lower by 3% as the rocket fueled rally takes a time out. AAPL and TSLA soar then fall back after their stock splits.

Here are some etfs, ytd, dividends not included

SLV +55.4% silver
GLD +28.2% gold

QQQ +25.5% Nasdaq100 Mostly tech stocks
TLT +20.7% US 20 year treasuries

SPY +2.7% S&P500 US large cap
EEM -0.8% Emerging markets equity
IWM -7.6% Russell 2000 US small cap

I took some losses on the rallies in AAPL and TSLA and then the pullbacks. I continue to play small ball, being relatively conservative as the market sorts itself out. I am still down a sobering 42% for calendar 2020, because of the egg I laid during the catastrophic March option cycle (-67% drawdown).

I have come back from that, but don’t want to risk another margin call. So I do some small time trades, and hopefully make a few bucks. I was about break even for the month, which isn’t terrible considering the market pullback.

I have nothing profound or insightful to offer this month. Same old, same old, since the margin call. The election may or may not be a catalyst for the markets.

SPY makes new high, Grade B-

Another +5% month for me, about the same as SPY, grade B-.

I got burned by hot running stocks AAPL TSLA and others. Still, keeping up with the market isn’t all bad considering how much dry powder I am keeping. The yearly number is still a grim -43% because of the margin call cascade of losses in March.

Here are some year to date etf numbers

SLV +55.2% silver
QQQ +32.6% Nasdaq100 US mostly tech

GLD +27.4% gold
TLT +22.7% 20 year Treasury bond etf

SPY +5.5% S&P 500 US large cap

EEM -4.7% Emerging Markets equity
IWM -6.8% Russell 2000 US small cap

My trading account -43.1%. Silver leaps to the front. Nasdaq continues to lead equities. The Russell and emerging markets are still down for the year. Gold and bonds have had a nice year.

I made a humorous prediction of SPY topping at 420 in early 2021. As always, predictions are mostly for entertainment.

SPY to break even for the year, Grade B-

SPY is now break even for the year. I have a positive month, up nearly 5%, self grade Grade B-. My come back from my devasting March loss continues. For the year, it is still a dismal -46% for me (a -67% loss was max drawdown).

Here is the year to date ETF tracking

TLT 23.1% US 20 year bonds
QQQ 22.0% Nasdaq 100, mostly tech 
GLD 19.0% gold

SLV 12.3% silver
SPY 0.0% S&P500 US large cap

EEM -4.7% Emerging markets equity
IWM -11.7% Russell 2000 US small cap

QQQ continues to roar ahead, despite a minor correction this past week. Silver running higher. SPY to break even, my account -46% ytd, as already noted.

The parabolic rise in some stocks such as TSLA AAPL AMZN had me covering sold calls for big losses.

I continue to keep a lot of dry powder on hand, with 60% buying power in reserve at most times. There feels like a disconnect between Main Street and Wall Street. Maybe Wall Street is looking past the immediate numbers.

Positive, but lagging, grade C

A positive month for the June option cycle, but that big 6% down day hit hard. I was up about 3% for the month, but this lags the approximately 7% gain in SPY, 9% in QQQ. My severe March losses still dominate the year and I am at -48% for calendar 2020. QQQ is now up nicely for the year, and SPY is only down 3% or so. Again, that’s what tends to happen after a severe drawdown.

ETF summary, year-to-date numbers:

TLT +19.9% US 20 year Treasury bond etf
QQQ +14.9% Nasdaq100 US mostly tech
GLD +14.8% gold

SLV +2.8% silver
SPY -4.1% S&P500 US large cap

EEM -11.0% Emerging market equity
IWM -24.6% Russell 2000 US small cap

Again I sit at a dismal -48% because of the -67% margin call month in March. I continue to sell naked strangles, with low capital utilization (high cash reserves). With the extended rally then the big down day, I was overly cautious and lagged buy and hold for the June option cycle. That’s the bad news. The good news, is that I was positive for the third month in a row.

Wall Street is looking ahead. Main Street is only starting to recover from the quarantine, while broad market indexes are close to recovering all losses for 2020. Businesses are just starting to open up. As always predications are mostly for entertainment, especially when there remains a great deal of uncertainty in the economy and society.

Lucky 8, grade B

Another up month, up about 8% for the May option cycle. My self-grade for the month is B. I am still down more than 50% for the year. That’s the unfortunate math of suffering a large loss. It takes a 200% gain to recover from a 67% account loss. Eight is considered a lucky number by many Chinese. Two up 8 percent months in a row are welcome.

Here are some etfs 2020 year-to-date:

TLT +23.1% US 20 year treasuries
GLD +14.7% gold
QQQ +5.0% Nasdaq100 mostly US tech stocks

SLV -3.3% silver
SPY -11.1% SP500 US large cap stocks

EEM -19.7% Emerging market equities
IWM -24.6% Russell 2000 US small cap stocks

My account down about 50% for the year because of the March losses.

Notable is the QQQ is now up for the year. SPY was about flat for March. Emerging market stocks and US small cap stocks still down for the year. Gold and long term treasury bonds continue to lead for the year.

Baby Steps, Grade C

Under normal conditions an 8% gain is a decent month. However, compared to the over 25% gain in SPY though, it looks poor. Factor in the -60% from last month, and I see it as a baby step forward. Grade is a gentleman’s C.

After going mostly to cash near the bottom, I was cautious getting back in. The US stock market experienced a monster rally off the lows. QQQ is now up for calendar 2020, SPY down about 11%.

Here are the year-to-date etf numbers:

TLT +23.9% US 20 year treasuries
GLD +11.0% gold
QQQ +1.3% Nasdaq100 mostly tech stocks

SPY -10.9% S&P500 US Large cap
SLV -11.8% silver

EEM -19.2% emerging market equity
IWM -26.5% Russell 2000 US small cap

My trading account down about 60% year to date. I move forward. Like the title says baby steps.

COVID-19 bear, margin call, Grade F

The Corona virus set off a market cascade. My losses are approximately 67% from recent highs. At the end, I moved mostly to cash. After transferring cash in to meet the margin call, I don’t want to chance another margin call for now. My account survived, just barely. One or two more really bad days and the pit would have been too deep.

Like many, I was slow to recognize how the decline would cascade on itself. Like some, I got caught in some of the sharp bear market rallies.

Some blue chip stocks saw huge losses. I remember when Boeing was over $400. Now under $100. Citi C saw a 50% drop to under $40. The S&P500, SPY is down approximately 27% for year.

I plan to scale back on my market activity. I definitely need to regroup, clear my head, after the two-thirds account haircut. I obeyed my rule number one, but just barely:

LIVE TO TRADE ANOTHER DAY.

It is easy to rationalize or give excuses, but the bottom line a bleak -67% for 2020. This compares to a 27% drop in SPY. I met the margin call, and still have my account, If I were more of a risk taker, or more stubborn in terms of taking losses, my account would likely have been liquidated. There were many near bottomless pits for naked option sellers like me. Personally, there are too many losers to note. Tesla was the biggest, accounting for about 20% of all the losses, first on the way up, and then on the way down.

Surviving is a small accomplishment during these scary times. I’ll keep updating the blog every month, after the third Friday option expiration. The reports may by scaled back, because with the smaller account, there will be less trading, possibly a lot less. That’s it for now, stay healthy, be grateful for all blessings, even the small ones.

Telsa moonshot leads to losses, Grade C-

I apologize for the late post. I have been feeling under the weather. The parabolic rally in TSLA resulted in large losses. I was short strangles (both puts and calls) and covered some of the calls for epic losses. Overall, I was down 1.8% for the month (this is back to Sunday). Overall, the my self-grade is C-.

Here are some etfs ytd for 2020:

TLT +9.3% US 20 year treasury bonds
QQQ +8.3% Nasdaq100 US tech

GLD +8.3% gold
SLV +7.7% silver

SPY +3.6% S&P 500 US large cap
IWM +1.3% Russell 2000 US small cap
EEM -3.2% emerging markets equity

My account -1.8%, with about a 6% from Tesla positions. Thankfully, I am not a stubborn person, because drawing a line in the sand in front of a parabola, is the recipe to ruin. Live to trade another day, that is Rule #1.

This morning Corona Virus fears have sent the stock mar\ket tumbling, so I have more losses not included in the numbers above, but will writ about them next month. 

Thanks for reading. Stay healthy.

Markets shoot higher, Grade C-

US stocks bolt out of the gate in January, with QQQ up over 5%. Me, I shoot myself in the foot, up a mere 1.2%. The culprits are Apple and Tesla running way too hot. I took big losses on sold TSLA calls.

Still, I am up for the month. Self-grade is C-. Could have been a lot worse, had I stayed in the way of the runaway train. Of course, leveraged longs on those hot stocks made a ton.

I’ll regroup and reassess my stance. I expected a modest decline, due to delayed selling to book gains in the new year, and pay tax in April 2021.

Overall Internet chatter remains mixed. There seem to be more people convinced that leveraged long is a no-lose strategy. More people that had a good 2019 and want to trade for living. On the other side, there also seem to be more regular folks that are raising cash, or moving all to cash. 

I remain cautiously bullish. Too cautious so far, but the year is young yet.

I posted a lengthy year-end recap on Reddit. For those that missed it, here is the link