Taking a bath with SPY - SPX Ramblings from a Rookie
FA: Climate for growth stocks this year has been abysmal. Tickers like TSLA have seen massive declines (shoutout to -53% in 54 days). Fed will keep hiking, not indefinitely, already moderating hike amounts, showing some easing in data. Cooling inflation, larger unemployment, etc. can/have/will cause relief rallies in the shorter term.
TA: Kangaroo markets tend to happen with indecision during each downturn cycle. We can see a wide range of descending lower highs and higher lows in SPY on the daily and weekly charts. SPY has arguably started this bearish trend for 20 trading days, although its easy to argue it's only 14 because of the short lived 12/12-13 rally. We saw a ~26.5% or 125 point decline over the course of 196 trading days measured from the 1/4/22 top to 10/13's bottom.
Targets: I still believe in 330, maybe as low as 290-270, but it's taking a lot longer to get here than I expected. Black swan or capitulation could hasten the collapse.
Chart:
indicators (Bonus)
MACD 21-50D convergence occurred on 12/7/22. It's approaching the MACD zeroline, but could bounce from it like it did way back in October of 2021. IME 21-50d tends to lag the actual daily trend by about 4 days; use it as confirmation though crosses seem to work on 15m and 1h too. General trend is still down, but RSI 14 ~4x-50, it's not super bullish or bearish, leaning toward the woods all the same.
Comments:
Currently holding February and March ITM/ATM puts. Holding your puts through some of those rallies can be painful (shoutout to turning 60 into 35 into 90k and then back into 60 so far). Holding long enough dated puts bought on a local rally before the selloff for less premium has been working out for me OK, but I've fumbled the play more than once chasing gains, or not playing resistance/support levels. Holding them through 50% losses to have them close ITM but sometimes less than the premium you paid is a rookie mistake. Daily in and out if you're correct about price action may be better if you have the time.
TA: Kangaroo markets tend to happen with indecision during each downturn cycle. We can see a wide range of descending lower highs and higher lows in SPY on the daily and weekly charts. SPY has arguably started this bearish trend for 20 trading days, although its easy to argue it's only 14 because of the short lived 12/12-13 rally. We saw a ~26.5% or 125 point decline over the course of 196 trading days measured from the 1/4/22 top to 10/13's bottom.
Targets: I still believe in 330, maybe as low as 290-270, but it's taking a lot longer to get here than I expected. Black swan or capitulation could hasten the collapse.
Chart:
indicators (Bonus)
MACD 21-50D convergence occurred on 12/7/22. It's approaching the MACD zeroline, but could bounce from it like it did way back in October of 2021. IME 21-50d tends to lag the actual daily trend by about 4 days; use it as confirmation though crosses seem to work on 15m and 1h too. General trend is still down, but RSI 14 ~4x-50, it's not super bullish or bearish, leaning toward the woods all the same.
Comments:
Currently holding February and March ITM/ATM puts. Holding your puts through some of those rallies can be painful (shoutout to turning 60 into 35 into 90k and then back into 60 so far). Holding long enough dated puts bought on a local rally before the selloff for less premium has been working out for me OK, but I've fumbled the play more than once chasing gains, or not playing resistance/support levels. Holding them through 50% losses to have them close ITM but sometimes less than the premium you paid is a rookie mistake. Daily in and out if you're correct about price action may be better if you have the time.
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