Trading Journal #7
08:38 am: Futures flat to start the day after overnight bounce to clear yesterday’s oversold conditions. Breadth hit very oversold readings yesterday, so a bounce is healthy. This week we have Jackson Hole so everyone is waiting to hear from Mr.Powell what can set the tone for the next 2 weeks. Staying open minded for now.
08:39 am: Morning focus on tech and energy names to see if they hold the open price and squeeze up into yesterday highs or they fade, go below yesterday lows and then it bounces. TSLA XOM yesterday showed some relative strength, so keep an eye on it. SPY IWM QQQ on watch for clues on what’s next.
Morning Trades: I started the day looking as planned into energy names to see if they squeezed up and they did with XOM Calls from yesterday going dip ITM for a +200% gain for swing long traders. I took AMD Calls early in the morning for nice gains and then saw a reversal buy on TLT plus C112 bull flow so I pulled the trigger and those gave nice gains on the day. Some minutes later I shorted IWM with some PUTs as action stalled below 193, so I pulled the trigger with some P192 for solid gains.
Losses review: I cut the laggards fast to avoid time decay, so happy with risk management so far.
Key Takeaways: On slow choppy action as we see, we need to be flexible and do not hold the bags for too long. Get in, ride the wave, lock gains, get out and move into the next one. If you hold the bag for too long, time decay can kill the premium very fast on choppy days when stocks do nothing.
Look Ahead: Today was a nice bounce to clear oversold conditions for yesterday, but the market is still waiting on Mr.Powell speech at Jackson Hole later in the week, so manage risk wisely, ride the small waves market is giving and stay open minded.