This week has been enormously difficult because of the wreck in my options trading, which caused many assignments. While I have offloaded and stopped loss for most positions, I still hold significant S&P 500 and Nasdaq indices under pressure in this stormy environment.
My mega loss, (yesterday is still bleeding more) is a classic example of poor trade management and over-trading. In some sense, it could be seen as force trades. The first loss-averse emotion kicks in when the portfolio falls over $10,000. Following the trade plan will require cutting positions, but the painful feeling of loss made me hold, and it is not hard to guess, the loss is ballooning each day and potentially hit over $20,000 loss. To the extent, a notice of liquidation occurs, as seen below.
Let’s see some updated charts below.
It has broken the near-term uptrend and signals more downside risk, notwithstanding any relief bounce along the way. For example, after the release of the job data yesterday, I offloaded a large chunk of Nasdaq. It continues to trend lower as the upcoming CPI is yet another risk-off catalyst as investors digest the swarm of negative headline news.
Nasdaq supposedly received some relief from the retreat of bond yield. Still, it eventually succumbed to losses as people decided to reallocate to the safer area such as the Treasury (resulting in a yield to drop) or even Gold.
We can see immediate resistance at the 297-298 region and support at the 283-284 region. Next week proves to be a heavy week, with CPI on Tuesday as the key highlight, which will hint at whether the Fed will push ahead with a 50 basis point interest rate hike.
I hope you have a restful weekend and a safe trading week!
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All is well.