Rollercoaster Week
A bit of a down draw, then a pop.
I have been waiting patiently for the market to drop a bit. Like, maybe too patiently. When the QQQ 0.00%↑ index left the channel it was in at the end of May, I weighed a lot of the risks and decided that I really needed to pull back cash.
But at the same time, there’s so much FOMO involved in trading, that it’s really, really difficult.
As such, my strategy was to just not even look at the account.
However, last Friday we finally got that pullback. Better yet, on Tuesday the market pulled back to exactly the 50 day moving average and then bounced up - for me, a buy signal.
The Week in Review
However, even with the pullback, I don’t love the look of the weekly chart for the QQQ 0.00%↑. It’s still at an RSI of 67.
It does actually feel like this could be the start of a consolidation period that could follow along that yellow line in the chart above. In a dream scenario, that consolidation would happen slowly and end up on the purple line of support where the volume is. If that happens, I’ll be in big time.
But as you can see with the daily chart above, we’re still at the top of the channel. So I made some moves this week, but I was cautious.
The result was good, actually.
I had a pullback, like the whole market did, and then bounced back nicely. I ended the week up 0.69%.
I also feel like we set ourselves up for a strong week next week.
Trades of the Week
This was easily the most active week I’ve had in a month or so. I made a variety of different moves. Let’s go through them chronologically.
I sold an EOSE 0.00%↑ $5.5-strike put (July02) for $26. Unfortunately, EOSE has been dropping since then.
I rolled my SOFI 0.00%↑ put from a $14-strike (June18) to a $14.5-strike (July10) for a credit of $25.
I sold a UUUU 0.00%↑ $12-strike put (July10) for $37
I bought back my SPCE 0.00%↑ put for $2 - that was a hilarious trade. About a month ago I thought people would confuse SPCX with SPCE and the price would go up, it did. On my personal account I bought a call and the value went up like 300%.
I sold 2x TE 0.00%↑ $5-strike puts (July17) for a total of $45.
I sold a PATH 0.00%↑ $9-strike put (July 17) for $23. PATH had a bad day yesterday and is a bit in danger, but that’s ok.
I bought 5 shares of UBER 0.00%↑ at an average of $67.85
I bought 3 more shares of RBLX 0.00%↑ bringing me 7 shares at an average of $56.87. I am losing patience with RBLX. So after I bought more, I moved my stop loss up a bit.
In total, I have a credit of $154 earned from options for the week.
Cash Position
Speaking of cash, I did obviously spend a little bit of cash this week. But I’m still well over $2,000 in cash which is more than 50% of my girlfriend’s total liquidity.
The reason I didn’t dip in and buy more things was with the idea that some of these puts I sold might get exercised and I’ll need that cash. If, for example even just the TE 0.00%↑ puts get exercised I’ll need to spend $1000 to buy those 200 shares.
In general, I’ve been pretty proud of myself and my self-control when it comes to my girlfriend’s money. We’re up 18,87% on the year, so far. That’s a great year, even if we were to stop now.
What’s the Plan for the Week to Come
The SpaceX IPO went out on Friday and hit a massive +2 trillion dollar valuation. With so much liquidity locked into that IPO - many investors aren’t allowed to start selling stock for a couple weeks or months - I think the market will actually get boring for a couple weeks.
In fact, with earnings season basically over for the quarter, my prediction is that the market keeps rallying until about mid-July or August.
Then, I expect a big pullback - potentially led by insiders selling SpaceX shares.
So, I’m going to cautiously keep trading around the levels I did the past month. Nothing crazy, sell puts on down days - close them once they lose 75% value. Keep earning cash. Keep waiting for a crash.
Stay smart out there!
Other than the last line, this is not financial advice