Trading Isn't Always Logical

THE WEEK

It was a wild and crazy week.  The trading herd’s reaction to the FOMC announcement on Wednesday took me by surprise and almost derailed my trading plan.  The Feds decided to hold interest rate where they are.  No raise this month after a 1 ½ years of steady raises to fight inflation.  I thought the herd would see that as positive, but here is what happened.  Crashed down and I am thinking “What the heck?” I was bewildered.  Then about 45 minute later buyers came rushing in and prices shot up.  

LOOKING AHEAD

We are just about finished with June’s major economic announcements.  The Market wants to go up.  We are hitting 52-week highs almost every day.  I believe we will have a two to three week respite of smooth uptrend which I intend to take full advantage of.  But be aware because I believe in July we will see another interest rate hike by the Feds and the Market will once again be very volatile.

HOW AM I DOING?

I had a great week.  We just finished week 8 of our DATA class.  I have doubled my $25,000 account.  The balance now stands at $50,949.50.  The week was great mainly because of one trade.  I had bought a PUT on the SPX on Wednesday when I saw the herd reaction to the Fed announcement.  While the reaction didn’t seem logical, I have learned to set aside my own personal believes and logic and just trade what I see.  What I saw was the market dropping like a falling knife.  I jumped in and 6 minute later exited with a 70% gain on the trade.

On Thursday I entered some Credit diagonal spreads to take advantage of the Market’s uptrend and the three day holiday weekend.  On Credit Spreads, option time decay (Theta) really works for us.

Thursday Deep Dive Webinar 

Accelerator Trades

These are trades that take advantage of the Market zooming up

Which it hasn’t done in quite awhile