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Weekly Report 2022-05-15

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WEEKLY MARKET OVERVIEW 

For the fifth time in a row, we opened the week with a gap down on Monday, with selling pressure on SPY (S&P500 ETF) continuing strong all the way until Wednesday. This new selloff brought prices below the key 400 level for the first time since March 2021.

But when extreme fear was spreading once again across the market, confident bulls finally stepped into the game. After an indecisive day on Thursday, a significant gap up opened the session on Friday, followed by buying pressure until the weekly closing bell.

Is this the real bottom or just another temporary green illusion? Next week we'll get an answer, but the small body weekly candle, with a long lower shadow on this crucial support level, may signal that the worst is finally behind us.

SPY Daily Chart 

 

SPY Weekly Chart 

 

Weekly market performance (Week 19/2022)

 S&P500 (SPY) -2.34%
 Nasdaq100 (QQQ) -2.36%
 Dow Jones Industrial (DIA) -2.08%
 Small Caps (IWM) -2.47%

Despite the market bounce at the end of the week, the Market Volatility Index (VIX) remains rather high, just below the 30 level.

 

WEEKLY PERSONAL PORTFOLIOS OVERVIEW 

At the end of March 2022, I started the 6K SPY Challenge inside the Options Trading Club (OTC), in which I allocated $6,000 to only play vertical credit spreads (both put and call spreads) on the SPY ETF. Each position has a $500 maximum risk, and the plan is to open no more than 2-3 new trades per week, with a maximum of 12 open positions at any given time.

The recent sharp market pullback forced me out of the bullish positions after the 3x stop loss level was surpassed. On the other hand, the bearish trades have been performing very well, with a 100% win ratio.

For example, on May 4, 2022, I sold to open a SPY 06/03 call credit spread at the 453/458 strikes for a $0.30 credit.

  

Last Friday, I bought back to close the position for a $0.03 debit, keeping 90% of the premium in just 30% of the trade maximum duration time.

 

As usual, if you have any questions, just send me an email at [email protected]

Take care and trade wisely!

Gianmarco 

 

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