Tuesday, April 14, 2020
The Dow gained 559 points on heavy volume but lighter than we've seen lately. Perhaps things will be getting back to normal. The advance/declines were 3 to 1 positive. The summation index is moving up. Less fear of the pandemic virus seems to be happening now as the earnings coming out are less than expected. The market took off from the open and closed near the high of the day. I did purchase some SPY April puts today. This trade is fraught with risk and is already showing a small loss. With only three trading days to go in the April option cycle perhaps this wasn't one of my best ideas. It will all depend on the reaction to the economic data out tomorrow morning. The S&P is overbought but could stay that way because after all it is option expiration week. The stop loss order for this trade is already in. GE was off almost a dime and the volume was heavy. Gold finished down over $5 after being higher earlier on the futures. It was a one day reversal to the downside for gold. The US dollar was lower on the session. The XAU was up a point, while GDX finished little changed. Both gold share indexes finished off of their highs for the day. I sold the GDX April calls I had early in the trading day. Once again the exit was lousy as I could have made more by holding them a while longer and being patient. But for whatever reason I just wanted to get out. The profit was 330%. My entry on this trade was a day late or the profits would have been much better. The exit wasn't good either. However I am thinking that today was probably the best time to get of this trade, we'll know more as the week goes on. I am already looking at the GDX May calls which I'll purchase if we get a trip back to the breakout point or short term oversold. It's also possible that gold just continues higher from here. Mentally I'm feeling a bit frustrated once again as my trading tactics leave much to be desired. The SPY trade may just be a reach and the closed out GDX trade should have been a lot more profitable. The VIX closed below its 50 day moving average and is extremely oversold on a couple of its short term technical indicators. I was looking for a bounce higher at the 50 day here and it didn't happen. The overall market was much stronger than the Dow today as well so maybe my idea of a decline right now is simply wrong. The NASDAQ is leading the way and has already closed above its 50 day moving average. If the S&P follows suit the SPY April put trade will be a loser. It will all get figured out tomorrow most likely. I'm already thinking that I probably should have just taken my profit form the GDX trade and called it a day. But there's no room for regret in this game. You've got to keep moving on. Asia and Europe were higher overnight and I'd expect more of the same tonight following the US markets lead. We'll see what tomorrow brings.
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