May 28 – Trade Plan

There’s that upside energy I mentioned in the last post. The market rebounded to the 2120 area with a big 1% move up.  There were no sellers left.   That’s a big hit to the bears who had all that they needed for a full blown correction. Supply and demand is the rule, and the supply dissipated and the sell off ended.  The tells were in the big bearish attitude which pointed to the market having a lot of pessimism which means less long exposure and less sellers going forward into Wednesday. Once you get a big sell off like that and a rebound that surpasses many of short stops, you get a short fuelled V-rally. Again, this is especially pronounced when there just isn’t many pressured longs selling, the law of supply and demand. That’s just right now though, things change quickly, it doesn’t mean we won’t revisit the lows in the upcoming days.  On Tuesday, the TRIN was over 2 and usually that means the lows will be retested in the short term.

New note: I just read Urban Carmels report and he’s got a whole report about the TRIN and Tuesday/Wednesdays action.  He’s basically saying that we can expect the lows to be revisited. In 2012/2013, there were 10 instances like Tuesday with strong bounces, all led to more selling. In the last 3 years, 20 instances were TRIN spiked over 2 and 90% revised the lows.  Caution is warranted for longs perhaps.


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Look at that chart, what a difficult market to trade. BIG gaps everywhere and lots of V-shaped recoveries. These past 5 months have shown a true battle of bull/bear, a market with relatively equal buying/selling pressures.

The RUT MIC stayed the same at about 4.5%. I removed about 7 1100/1120 put credit spreads for between 25c and 42c as the market rose I did this to release some margin and also to basically start taking off some of the trade.  The delta is at about -20 which is a pretty big change from Tuesday when I was getting ready to adjust on the downside! I will adjust at about 1262. My hope is that we get till next week before that happens (soak up some good time decay without any adjustments). The theta on the trade is about $53 per unit. I think the best case scenario is about 6.5% for this trade.

The SPX MIC is sitting at 5%. I haven’t done anything to it in a week.  The delta is at $0. Time decay at $100 per unit per day.  I think best case for this trade is about 7.5-8%.


May 27 – Trade Plan

The market cracked that important 2120 area and proceeded down quickly (as expected if it broke that area) and it even briefly went through the next support at 2100 only to close at about 2104.   So we’re now about 1.5% off of all-time highs but the attitude and sentiment are very bearish (much too bearish when we’re just 1.5% away from ATH) which usually lends itself to a bounce as it typically means many people are under-exposed to the market (already sold or unexposed = less sellers going forward). AAII Bullish sentiment is at 5 year lows, Stocktwits stream is quite low etc etc which usually means that the worst of the selling is likely over. We’ll probably extend a bit lower through 2100 but I’d expect up momentum soon.

My plan?  I’ll give the downside on the RUT until about 30 delta to adjust and the downside on the SPX to hit 25-27 delta before adjusting.  Not a whole lot of plan 🙂

I added a 1270 calendar to our RUT trade on Thursday as a slight delta adjustment for any upside risk. Other than that, there’s been no adjustments since Thursday. The MIC trade is sitting at about 4.5% which is fantastic given yesterdays waterfall decline and increased volatility. I gather without that increased volatility the trade is sitting at 5-5.5%.

The SPX trade is sitting at 4.2% and hasn’t been touched since Thursday. It’s sitting at about 7-10 points away from a downside adjustment and I’ll monitor that closely. If we can get a slight bounce and end the week anywhere between 2095-2140, we’d be sitting very nicely with the trades.

The Protector Alpha is down about 0.7% yesterday (as expected) with a decline like that.  A new thread appeared on the main forum/community that I am a part of, and it is a discussion talking about new methods for the protector.  I am quite excited by the developments and will start putting some thought into it.

As for the Paris trip:

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May 21 – Trade Plan

We’re consolidating between 2120 (support) and 2130 (resistance).  We had hit 2135 during the fed release but retreated back into the range. This is a tight range that we’ve been holding for 6 days.   I’m not really sure which way the odds favour. Time will tell.  My guess is that we’ll have a shallow pullback then an up move towards 2150-2160. Mostly this surmising where the market goes is just for novelty. I don’t really use it all that much practically, but I do enjoy it.

The positions are sitting nicely with the RUT MIC now sitting at ~3.5% and the SPX MIC sitting at ~3.7%. That’s a nice gain from the day before.  It appears we started to see some accelerated time decay yesterday ahead of the long weekend.

Yesterday, I spent some time testing out a 9 day no touch condor and had some decent results. I’m going to do 3 years worth of backtesting but so far It had a 2.9% weekly return (after commissions). A 78% chance of making some money and it was closed with a loss of 20% or more and a gain of 11% or more (after commissions).

The protector alpha is doing well. A bit ahead of SPY which is nice. If we had used the regular ETFs instead of the equities we use now, we’d be behind by a good amount.

Ash and I leave tomorrow for a 3 day (sans kids) Paris trip. I’ll post a trip report on this blog.

Trade Plan – May 20

Not a whole lot to report.  Both MICs are now sitting at around 2.7%.  I made some adjustments yesterday when it hit the bottom of the ranges. Sold 1 more put spread for each and closed about 2-3 calls spreads.  Got the deltas a bit more reasonable for any potential push up. I’ve updated the sidebar with results.

The market consolidated today and it consolidated above the 2120 resistance that was tested so many times this year.  This type of consolidation tells us that most stock holders are holding off for higher prices (not much selling) and sidelined money aren’t chasing just yet (not much buying).  So basically, if it holds above this area we should see the sidelined cash and shorts succumb which equals more buyers in a market where there is not much selling  (supply/demand) = up we go. All bets are off if we have a sustained move below 2120 though.


Epic Tesla Road Trip

Haven’t updated the travel part of the website in a while but as you’ll see below, you can expect a lot more updates in the coming 3 months.

Ash and I are going on a solo (sans kids) trip to Paris on the 23rd for 3 days.  We will get back on the 26th and finish packing, and leave for the 30th on an epic 3 month road trip across Europe.

We’ll be driving in our electric Tesla and be utilizing the superchargers (free gas!) along the way. We’ll go from Malta by Ferry to Sicily and onwards through Italy, Switzerland, Liechtenstein, Austria, Germany, Denmark, Sweden, Norway and finally France and the UK. We depart the UK in late August to arrive back to Cayman Islands so the kids can start school.

We’ll be staying in B&Bs, airbnbs and hotels along the way.

Leg 1:

From Malta, we’ll board the Virtu Ferries and arrive in Pozzallo, Sicily. It’ll be a 3 hour drive to Palermo where we will board the GNV ferries to Genoa.

From Genoa we’ll travel to Arona and stay at a B&B for 4 days. We’ll then make our way to Innsbruck, Austria for another 4 days.

From Innsbruck, we’ll hit Salzburg and Vienna and make our way up towards Germany (Regensburg, Heidelberg/Rothenburg, Cologne, Dresden, Berlin, Hamburg)

Black square are places we’ll likely stay and red dots are the super chargers.



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Leg 2:

Sweden, Norway, Denmark

Leg 3:

France, Belgium, Netherlands

Leg 4:


Trade Plan – May 19

As per my previous post, the market seems to be punching right through to 2150.  There’s little overhead resistance as anyone afraid of these price heights sold weeks ago.  Sentiment is still bearish but price is price, so it’s best to follow that.

Urban Carmel believes all gains will eventually be sold within the next couple of weeks.  Cobra believes the same.  These are the only two technicians I really follow (mostly out of interest and not practicalities).

Summary of their positions:

The RSI made a new high and likely we should see a small pullback and then higher highs.   Typically, before a top can be considered, we have to see a new high without a new high in RSI. He goes on to say the triangle usually means last push up in wave theory and usually is the final flag and as well,  its “sell in may” time. Both use different evidences but come to same conclusion:

A new high followed by a pull back erasing all the gains since last week.

My plan?

On any pullback I will get my delta’s closer to 0 or slightly positive to protect myself from a big push up towards 2150/2160.

If there is no pullback and we go straight there, I’ll manage my deltas as I have been –  by taking off call spreads.

The June RUT MIC is up 2.3% so far (it was up about 3%) but the huge move up yesterday put pressure on the call side.  Our delta is still ~27 which I’ll reduce more today. Yesterday, I took off 6 of 35 call spread units. For some reason or other, I hate taking off call spreads and that’s gotten  me in trouble before. So now I make sure to be pretty diligent in adjusting. I think I could have been a bit more diligent yesterday by taking off another 3 units to halve my delta.

The SPX MIC is about 2% as well. Not really pressured for adjustments yet though. I made no adjustments yesterday. Wasn’t pressuring our  adjustment points.

The alpha portion of the protector is up about 5.8% and the hedge is down about 2% putting is at about 3.8% for the year (just a bit above SPY but we’re fully insured/hedged). Gotta love that.



May 15 – Trade Plan

There it is. All time highs as SPX breaks 2120.  At this point, it is likely we continue upwards. If it was going to sell it would have done so on negative headlines last week (same headlines really for the past few months). There’s a ton of scary news out there and all the would-be sellers have sold. We’ve been hanging around this area for 4 months. We’ve tested 2120 umpteen times and resistance can only hold so long.  You get locked in this cycle when sidelined cash is reluctant to buy near resistance and with sellers locking in profits as it approaches the same resistance. What will happen is both these groups (the ones with cash and the ones who sold), will finally succumb and buy (once it is clearly past resistance).  So once it clearly breaks, I think we’ll have a pretty big up move towards 2150.

What am I doing with my trades? Again, not a whole lot. I only use my opinions to sway a little bit re adjsutments without breaking my rules.  My deltas are pretty far negative right now so I’ll probably just balance them a bit more in the next few days rather than waiting for a delta of -30 I’ll probably start adjusting sooner at -20.

As for the protector alpha, I am eagerly awaiting 2150 so I can roll up my long insurance. It’s doing well, up about 4-5% for the year (I levarage 6.5x so 35% or so).




May 13 – Trade Plan

Yesterday was interesting.  The market sold off quite a bit and on the bounce I sold 3 units of call spreads with the intent to sell the equivalent put spreads on the next leg down. I did this because:

1) the downward strength was strong and selling some call spreads on the bounce even out our deltas a bit.

2) I was hoping to enter the equivalent put spreads on the second leg down at a better price.

The latter  didn’t really happen. So I had to sell them a little higher. An ode to the pains of trying to market time.  You’ll notice I only do that with super small units 🙂  Sometimes it works out and sometimes it doesn’t.  Of course, it was really minor and I’d only do if it actually benefited the trade as a whole (which it did re #1).

Right now, during my off time, I am backtesting 9 day iron condors (without much success yet) and the Friday butterflies (so far promising).  I wish I had more time 🙂 There is so much back testing to do.

May 12 – Trade Plan

As per my post on the 8th of May

There is three reasons why the market is likely to pull back.

1)  VIX  opened and closed above its Bollinger band. From Cobra: 81% chance of market revisiting the Apr 6 lows

2) The RSI made new lows and hasn’t show positive divergence. Down momentum is strong

3) The last down leg exceeded the 100% measured move which usually means another leg is likely.

What’s my plan? I’ll probably adjust slightly on any big bounce to make sure my deltas are zero to slightly positive.”


We did have a big bounce but it was so big I actually couldn’t adjust in favour of any perceived pull back, in fact it was so large, that I had to adjust a bit on the other end!  Yesterday we started to see the pullback and today the futures are down almost 20 points from yesterdays close. There it is I guess.

Will a large gap down affect any of the current June trades? No, not really. The RUT trade will actually end up exactly at delta neutral and the SPX trade will end up at about delta -10 to -15 from +10-+15.  The volatility will increase making everything expensive and anyone trading these types of strategies have to expect their broker balances to dip. Not to panic, it’s mostly superficial. It’s increased volatility which piles into the options you sold, making them more expensive to buy back. As well, during panicky days the mids get large and you’ll tend to see wild swings in your net liquid. I’ve seen my balance swing by 50k from open o close with no movement in the underlying. It’s all re volatility and inaccurate mids. As long as you adjust at the appropriate delta, all of this volatility will seep out as time goes on and you’ll end up fine.

Oh, the March trade did 5.7%, didn’t have the best luck closing what was left yesterday.

As for the protector alpha, I lowered overall exposure just a bit more yesterday. Good timing apparently.