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Weekly Report 2022-05-22

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WEEKLY MARKET OVERVIEW 

After opening the week with a gap down for the sixth time in a row, the SPY (S&P500 ETF) showed some signs of relief on Monday and Tuesday. However, on Wednesday, a long solid red daily candle signaled that fear is still high. The week then ended with mixed signals, with an attempt to rebound on Thursday followed by a sharp swing to 2022 lows on Friday.

More drama is to be expected over the upcoming weeks. But despite the overall market sentiment being overly bearish, under the hood we can see an encouraging money rotation into aggressive market areas such as biotech stocks and small caps.

  

Weekly market performance (Week 20/2022)

 S&P500 (SPY) -3.01%
 Nasdaq100 (QQQ) -4.39%
 Dow Jones Industrial (DIA) -3.04%
 Small Caps (IWM) -1.12%

After another stormy week, the Market Volatility Index (VIX) remains quite high, just below the 30 level.

 

WEEKLY PERSONAL PORTFOLIOS OVERVIEW 

In the middle of March 2022, I started an experimental Wheel Strategy position on M (Macy's) inside the Options Trading Club (OTC). 

On Friday, with M down more than 16% on a weekly basis, I closed the entire position with an overall profit of about $186. With a maximum risk on the campaign of no more than $3,000, that results in an ROI of 6.2% in 67 days, equal to an AROI of 33.9%. That's quite impressive, especially considering that M shares are down about 24% during the same period.

 

The plan is to keep testing this strategy over the coming months, also on different underlying stocks and ETFs. A complete analysis of the strategy, including trading principles, position sizing, and the thought process behind every decision, will be part of one of the live sessions that I will be hosting this year inside The Wheel Academy.

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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