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Weekly Report 2022-10-02

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WEEKLY MARKET SUMMARY 

This is what I wrote in the September 25th Weekly Report:

"With the SPY (S&P500 ETF) gapping down at the open on Friday and pulling to the 2022 lows, we are not far from testing the major support level around the 360 mark, which, if broken, could spark a new wave of panic selling towards the pre-pandemic highs around the 340 level. In the worst-case scenario of losing this second key support as well, an extended free fall could push the correction to the test of the 300 level". 

Prices closed the week at yearly lows after the 360 key level was breached in the last session of the third quarter of this difficult year. As we enter Q4-2022, we can expect more bearish pressure as we approach the next major level of support at the pre-pandemic highs around the 340 mark. So, after such an exhausting year, we must keep waiting and see how long it will take for bullish buyers to enter the market and provide some relief from this painful and interminable correction.

 

Weekly market performance (Week 39/2022)

 S&P500 (SPY) -2.93%
 Nasdaq100 (QQQ) -2.99%
 Dow Jones Industrial (DIA) -2.89%
 Small Caps (IWM) -1.43%

With the broad market slipping at the yearly lows, the Market Volatility Index (VIX) remains quite high around the 31 level.

 

WEEKLY TRADING SUMMARY 

Since its launch at the end of August 2022, the Small Account Challenge has become the most popular and active section inside the Options Trading Club (OTC). Here follows the weekly commentary by our amazing moderator, RoRo, who is also the creator of the challenge.

"We are now 6 weeks into the challenge. The Options Trading Club is a big proponent of selling options and collecting premium. This steady cash flow can be used as an additional income stream, or the extra cash can be used to put on new additional positions. The Small Account Challenge is also open to any other type of stock or options trading. Long options or outright stock shares can be bought and sold at a profit. Bottom line.... the goal is to increase your overall account balance.

Over the past few weeks, we have seen the incredible results and the substantial premiums that some traders have collected. We've also seen what can happen when your trades go against you. The main idea behind this experiment was for each individual trader to learn what can be done and what can't be done with a small account. Or better yet, since each of us have different trading styles and risk tolerance, what works best for them and what does not. I hope that we all are learning a thing or two.

I think it's important when you look at these results, that you understand that they are "temporary." Like the markets themselves, up one day, down the next....and as we have seen of late....down again the next day and down yet again the day after that. You shouldn't look at your account value everyday as if it was the end all be all. If you set a goal to reach by the end of the year, let it play out. Like a football game, your team might be down big in the first quarter, but there is a lot of time left in the game....and anything can happen. Keep your eyes on the ball and not on the scoreboard.

With that said, I thought it would be interesting to see exactly where everyone stands on an actual account balance basis. If anyone has any open positions, I calculated the values as if those positions were closed at the end of the day this past Friday. Again, I would not read too much into these numbers since there is still time left on the clock.

Also, keep in mind that since we started the challenge, the markets have dropped around 15%. Many of us with open positions are currently experiencing a "loss" but with the rally that is soon to come, we should all be sitting pretty. (Yes, I do have a Magic 8 Ball and when I asked it if we will get an up move, it said, "Outlook Is Good.")

#1 Current Account Balance $6,580 +30% No Open Positions
#2 Current Account Balance $5,554 +11% One Open Position
#3 Current Account Balance $4,892 -2% No Open Positions
#4 Current Account Balance $4,728 -5% Two Open Positions
#5 Current Account Balance $4,609 -7.5% Three Open Positions
#6 Current Account Balance $4,207.69 -15.8% Four Open Positions
#7 Current Account Balance $4,187 -16.2% Three Open Positions
#8 Current Account Balance $3,681 -26% Two Open Positions
#9 Current Account Balance $3370 -32% No Open Positions

Some are sitting on a nice amount of available cash to trade, while others such as myself have used up almost every penny and have to wait it out. I still believe that we are in a great time to be trading, so take advantage of the great opportunities that this bear market is giving us. Until next week.......Happy trading and have fun out there".

SPECIAL ANNOUNCEMENT

The Wheel Academy is my private options trading coaching program designed to help traders take their skills to the next level and generate consistent returns in the stock market.

Later today (Sunday, October 2nd, 2022) at 11 a.m. US Eastern Time, I will host a FREE Live Webinar to explain how the coaching program is structured.

During the event, I will reveal which options trading strategies are already available in The Wheel Academy and which I'll be teaching in the coming months.

If you want to register for the event, simply CLICK HERE.

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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