Hi Guys,
The market went into volatility mode after that CPI announcement yesterday and it's been whipping and whapping all over the place. When I emailed yesterday it was looking strong, as if it had shaken off any concerns about the CPI. But by the end of the day, the S&P 500 had dropped all the way back down to that 4500 level it seemed to like last week. Then overnight last night, it dipped down another 40 points, but came right back by this morning.
Speaking for myself, I'm somewhat de-sensitized to the volatility. After January's wild market conditions, I'm kind of used to it now. It also helps that I don't have a lot of positions open at the moment, so that lowers the amount of emotional charge I get from these volatility swings.
That said, the SPY options position that reached its time limit yesterday was pretty challenging to witness. Two days ago, before the CPI announcement, it got to within 6 cents of its profit target, but never quite made it. Then the CPI announcement happened and the SPY price went way down, which was already a bummer. But the same trick got pulled a second time, and the price of SPY marched up yesterday in the morning to almost the same exact high, which was so unexpected and seemingly fortunate, only to turn around a second time and drop all the way back down to a point where I took a loss on the position by the end of the day. Not particularly fun.
The interesting part in all this is that when you look at the back tests, you can see the general results but can't easily see how many "close calls" there were or what sort of emotional charges might have been faced along the way. There can be many! To a large degree though, the less closely we monitor our trades, the less charge we might feel from them. So we might have some control over how much of an emotional roller coaster the trading experience ends up being.
I bought VMW this morning. It wasn't on the watch list because it wasn't close to setting up for an entry, but it's been in a strong uptrend and it had a huge drop today and triggered an entry. I bought stock in the main account and I bought options in the extra options account.
I was late setting up the watch list by the way. I got it prepared yesterday and somehow failed to hit the final button to load it. It didn't get updated until about 15 minutes after the opening bell. None of the tickers on the watch list have triggered as of yet today. Thanks for your patience guys!
If you have any questions or feedback, I'd love to hear from you.