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Tales of a Technician: How I’m Managing the Bear Market

January 24, 2022

By | 1 Comment

Here’s my take on the current market action and how I’m trading it.

Notes

Bear Market Best Practices

Charting Tips

High VIX

Fool Me Once: Lighten up on bull positions into strength so I don’t get hit as hard if we rollover again.

Fade the Fear Trade: Oversold market + VIX spike to 35/40 = sell puts or bull puts

I do not like chasing strength here. If we bounce a 2nd and then 3rd day and you’re entering new bull trade – I’m not excited about that.

 then Bear Retracement

Trade Management

Trade (I bail if I’m wrong)

Investment (I don’t usually bail if it goes against me, because it’s a long-term play)

                -Proper sizing. Drawdown < 10% of account value.

Phoenix Examples

We entered this drop with all bullish positions.

                -Long-term stock positions

                                -VZ, sell calls

                                -DIS, starter position.

                -Core monthly naked put: EEM – I could have exited this at breakeven if I needed to reduce portfolio risk.

-Core monthly naked put: Jan $203 naked put for IWM. Exit Thur morning at gain. We used an intraday bounce to exit a naked put at a profit.

                -New Trade: Sell new OTM naked put (Fade the Fear): Sell Feb $185 naked put for IWM.

                -Smattering of stock positions with naked puts: CLF, KBH, FCX, XLE, XLF

                                – Add size at higher credits to recoup losses quicker on the bounce.


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One Reply to “Tales of a Technician: How I’m Managing the Bear Market”

  1. MattGuarino says:

    Great video, real gems in this one on how and why to weather a draw down, some ideas on what to do to mitigate some pain.

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