FREE REPORT

Weekly Report 2022-08-21

trading journal

WEEKLY MARKET SUMMARY 

Finally, after over a month of continuous buying pressure, the market gave back some of the recent gains. However, that really happened only on Friday, following four consecutive green daily candles, when SPY (S&P500 ETF) opened with a big gap down and posted a relatively short but solid red candle with almost no lower shadow.

Going into the next trading week, we might expect further weakness and a test of the first level of support at the 417 level. If that doesn't hold, the key level to watch then would be at the 400 mark.

Weekly market performance (Week 33/2022)

 S&P500 (SPY) -1.16%
 Nasdaq100 (QQQ) -2.28%
 Dow Jones Industrial (DIA) -0.23%
 Small Caps (IWM) -2.85%

In a red week for the broad market, money has rotated into the more conservative Dow Industrial stocks.

Despite the weekly pullback, the Market Volatility Index (VIX) is still relatively low, just above the 20 level.

 

WEEKLY TRADING SUMMARY 

Here is the summary of the main events from last week at the Options Trading Club (OTC).

Earnings Iron Condors 

After a few disappointing trades, on Monday I opened an Earnings Iron Condor position on WMT, with the company reporting earnings the following day before the open.

Open: Earnings Iron Condor
Stock: WMT
Expiration: Aug 19th
Setup: +124p -126p -140c +142c
Entry: $0.56 credit

After the earnings announcement, the stock spiked up, testing the short call strike of the iron condor, and remained at that level for three consecutive sessions. On Thursday, with the stock price still very close to the short call strike, I decided to lock in profits and take off any risk. That allowed me to retain 59% of the collected premium and book a nice 16.5% profit (calculated on the width of the spreads) in just 3 days.

Eventually, the position would have expired worthless at the close on Friday, as WMT was dragged down in the overall market pullback. However, like in any other trading strategy, risk control and capital preservation are the keys to long-term success. In uncertain situations like these, I rather prefer to stay on the safe side of trading management.

 

Small Account Challenge

Thanks to another brilliant idea from our amazing moderator RoRo, next week we are launching in the Options Trading Club (OTC) a new paper-trading challenge. As the name suggests, the Small Account Challenge is specifically dedicated to traders with limited capital available for trading.

Here are the main rules for the challenge:

  • Start Date: 08-22-2022
  • End Date: 12-31-2022
  • Starting Account Size: $5,000 cash account (no margin allowed).
  • All trading strategies are allowed.
  • Trades should be unique (not already posted in other channels).
  • Trade results for every participant will be recorded on an online spreadsheet visible to all members.  
  • The winner will be the trader with the largest account balance on the last trading day of 2022.  

I expect that this new challenge will be an incredible learning opportunity for traders of all levels of experience. In future Weekly Reports, I will, of course, keep you up to date on the Small Account Challenge results. 

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

Take care and trade wisely!

Gianmarco 

Get My FREE Weekly Report

Every Weekend I Will Send You the Summary of My Real Trades

No spam. Unsubscribe at any time.