April is upon us, and you know what that means – another monthly retrospective! I can already feel the good vibes bubbling to the surface. Lest you are unaware, I’ve started a new series this year here at Tales of a Technician. Every month I climb my trading turret and look back at the battlefield. Laid before my eyes are all my victories and defeats. Like a good little general I pull out my war-torn notebook and jot down all the lessons I learned. I’m determined to only make mistakes once before correcting my behavior. After all, my beloved soldiers are counting on me.

My writings fall into four categories – the monthly theme, what I did right, what I did wrong, and my trade of the month. Let’s hop to it.

Shots Fired

The theme for March was easy to spot. We experienced the first real test of the Trump rally since November. From peak-to-trough the S&P 500 dropped 3.6%, probing below the rising 50-day moving average in the process. The funny thing is 3.6% isn’t even that big of a pullback, but given how extremely bullish the market has been it seemed like a massive shift. Plus, other areas suffered even more. For example, the small-cap-laden Russell 2000 dropped 6% before buyers finally said no mas!

If you’ve been leaning bullish this year with naked puts, bull puts, and the like, then March was probably the first real test of your risk management protocols. Did you get stopped out of a lot of bullish trades this month? Did the volatility monster wreak havoc on your well-laid plans? If so, what do you need to change about your trading so that next time the market gets a tummy-ache, you don’t give back all your hard-earned gains?

What I Did Right (aka why my mommy should be proud)

Risk mitigation was the name of the game this month. With financials taking it on the chin (see XLF), I elected to reduce exposure elsewhere in the portfolio. Some positions that were profitable returned to breakeven during the downturn. I bailed on a handful of them simply to cut down on my overall delta. I also tacked on a few hedges for good measure. So far, I’m happy with the audible call.

What I Did Wrong (aka the last vestiges of stupidity)

Perhaps my largest misstep this month was pressing my bearish bets in bonds when they were on the ropes. Rather than sitting tight with my existing bear calls, I upped the ante with a few extra spreads when TLT really fell out of bed at the beginning of March. Needless to say, the rebound in recent weeks has necessitated a bit of shaking and baking. I remain firm in the longer-term bearish outlook for TLT, but it sure looks close to completing a multi-month bottoming pattern here.

Trade of the Month

My monthly RUT Condor took the cake as the best-behaved position. Indeed, profits have reigned for delta neutral premium sellers in the Russell for months now. Since December 5th, the RUT has been entrenched in a narrow 5.7% range. Of course, now that I’ve brought attention to it the Market Gods are sure to spoil our fun. Nonetheless, here’s to hoping small-caps remain neutral for months to come.

Check out the entire 2017 retrospective series:

• The January that was
• The February that was
• The March that was
• The April that was
• The May that was
• The June that was
• The July that was
• The August that was
• The September that was
• The October that was
• The November that was
• The December that was

Financial freedom is a journey

The Tales of a Technician series is brought to you by Tackle Trading.

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

# Sign up now for a 15-DAY FREE TRIAL #

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses, and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involve a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax, and accounting advisors, to determine whether such trading or investment is appropriate for that user.