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Sunday, December 30, 2018

Weekend Portfolio Analysis (December 30, 2018)

Recent Trading Activity

- Closed all bullish bets that had been deployed since February. All of them at a loss. At one point there were more than ten thousand dollars in gains there. Definitely frustrating. Many mistakes were made this year, putting personal issues aside, I will go over them one by one in an upcoming article. Final record for the year here.

Reminder: As explained in the October 13 article, I will stop writing Weekend Portfolio Analyses at the end of 2018. I will keep trading and keeping a track record of the positions as usual.

So, far, I have opened two 2019 positions:
- Jan 2019 SPX Credit Put spread
- Feb 2019 RUT Credit Put spread

Market Conditions
(Click on image to enlarge)
Stochastics: 52 (Neutral. Up from 7)
McClellan: -29 (Neutral. Up from -300)
Stocks above their 20 DMA: 14% (Neutral. Up from 5%)

Oversold Extreme.

In the previous weekend analysis, I illustrated how short-term oversold and due for a bounce the market was. It was in fact one of the most pronounced extremes I had ever seen. Surprisingly, Monday brought a little bit more weakness, before the final rebound took place. All in all, the market was significantly up on the week and now we are back to no man's land. Despite this No man's land reading, the % of stocks above their 20-day remains very low, which to me indicates that the downside room is more limited at this point than the upside. I favor some more upside action this upcoming week.
I have removed all support lines and drew a new one around 2,350. In fact it should be wider than that, perhaps a block between 2,300 - 2,350 makes more sense and that is likely to offer some support on the way down.
2019 is definitely going to be a very interesting year, I will continue trading and investing, as usual, staying the course. But given the calamitous results of 2018 in the particular area of Credit Spreads trading, there will be some changes in my approach, which are already detailed in the LT Options 2019 Trading Plan.pdf
The Russell Index:
(Click on image to enlarge)
Similar situation to that of SPX and new horizontal support around 1,260. That's the guideline for Put selling: preferably strike prices lower than this level.


Current Portfolio:
No 2018 positions left.


Economic Calendar


Tuesday: Markets closed for New Year.
Wednesday: US Manufacturing PMI.
Thursday: ADP Non-Farm Employment change. New Home Sales.
Friday: Europe CPI. US Non-Farm Payrolls. Fed Chairman Powell speaks.


Thanks for reading.
Thanks for your support.
LT


Check out 2018 Track Record


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