Comments: Adding in some QQQ in the March cycle, targeting the strike paying at least 1% of the strike in credit to emulate dollar cost averaging into the broad market. Will generally look to take profit or roll at 50% max.
@NaughtyPines naughty, what does your intuition say about the state of the market currently? I find great value in the intuition of experienced traders who've been through many cycles of bull/bear markets. As history doesn't repeat but they often rhyme. TIA for the insight 👍
NaughtyPines
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@EqEx, My basic thought is that this is akin to the Great Recession, at least in the sense of the ramp-up of fairly massive monetary and fiscal stimulus, followed by an attempt to normalize things over time. In spite of the fact that (relativistically speaking), borrowing money is at or near "free," the market is adjusting to the fact that it could get less free over time and so is doing a rotation out of things that don't benefit as much where the money is not as cheap. Unfortunately, how long this adjustment period will go on is anyone's guess, but it could be protracted, since it will take time for the Fed to get back to anything approaching the rates and/or balance sheet that existed prior to the pandemic. One thing I pay particular attention to (that few others seem to do in the exact same way) is my portfolio's net delta, which I feel more comfortable with being "flatter" in this environment. This either means subtractive adjustments that take off profitable long delta or the addition of a broad market short delta hedge of some kind so that I'm not so directionally long or am net delta flattish in the short to medium term. I don't think the typical risk parity setup (long equities + long bonds/treasuries) will work so hot here, so I'm using other tools in the tool kit.
NaughtyPines
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@NaughtyPines, Keep in mind that I am literally in zero static delta (no stock). Almost everything at the moment is a dynamic options setup, so my sentiment is slightly more relaxed relative to a person whose 401(k) is all static long delta stock and who's got zero ability to meaningful hedge things off or has to resort to imperfect hedges (i.e., inverses, leveraged inverses, contangoized volatility products) in an attempt to stop the bleeding.
SabahEquityResearch
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buys for a correction is viable . longer term I believe we will go much more down
NaughtyPines
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@CountLikeWallStreet, Pretty much why everyone should stay nimble. We could get a V-bottom; on the other hand, things could get really butt ugly, and you will want to be able to take advantage of butt ugly. Unfortunately, that means keeping some dry powder off to the side, so I'm deploying capital at intervals as long as the IV is there and staying with (relatively) shorter duration premium selling in broad market.
P4raboliK
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@NaughtyPines, There's a million factors why they setup the perfect narrative for a market crash, just look at all of that stimulus money trapped in BTC, and so many EV companies with no track record of success, shitcoins, etc, the QQQ painted a H&S on the MONTHLY RSI, just like BTC did before it smashed down with authority, I don't think we bounce Monday. Look @ MSTR (OWNER OF MOST BITCOINS EVER, SEC FILING REJECTED FOR "NON COST VALUE IN THEIR BOOKS FOR BTC" , 00 dot com bubble which I was only 14, HUGE PUMP, HUGE DUMP when the selling commenced. The speculative bubbles have already been bursting for months, but there is way more room to fall. Many companies will be bankrupt SOON in my opinion. I make over 130K a year and I'm still feeling the pressure coming our way... I slashed everything off of the table in December. I felt like it already made the switch at that point. Checkmate... GL everyone, go bullish on being bearish for a bit lol.
NaughtyPines
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@P4raboliK, I can fully appreciate that point of view and (I'd have to look back), but I think I just let everything kind of organically flatten out toward the end of the year, at least in the IRA. While I think there's a bit of "hair on fire" associated with the Fed starting to go from 0% to still less than we were before the pandemic, the market is probably coming to the realization that more monetary and fiscal stimulus won't be forthcoming, although it's been told that for several months running. Sometimes, it just takes time for the light bulb to go on. For some, it went on in September or October ... .