Brook Reef

Goodness. Gut punched today. Not ready to share. This is an abbreviated version my normal weekly note. Check out yesterday's post where I debate ending this blog altogether.. _______________________ Performance last week: U.S. Indices Dow  +2.2%  to 29,910. S&P 500  +2.3%  to 3,638. Nasdaq  +3.%  to 12,206. Russell 2000  +3.9%  to 1,855. CBOE Volatility Index  -12.1%  to 20.84. S&P 500 Sectors Consumer Staples  +0.6% . Utilities  +0.2% . Financials  +4.6% . Telecom  +2.7% . Healthcare  +0.5% . Industrials  +2.4% . Information Technology  +2.1% . Materials  +2.7% . Energy  +8.5% . Consumer Discretionary  +3.% . World Indices London  +0.3%  to 6,368. France  +1.9%  to 5,598. Germany  +1.5%  to 13,336. Japan  +4.4%  to 26,645. China  +0.9%  to 3,408. Hong Kong  +1.7%  to 26,895. India  +0.6%  to 44,150. Commodities...

I'm thinking of ending this blog.  I've been writing every single stock market day for 7 months now. I've taken a day or two off along the way - but finding charts, sharing comments, and also providing commentary on daily news has been both fun and exhausting! I haven't performed all that well either in that time.  I fought the biggest stock market rally ever...and lost. Badly. I am down 20-30% this year in my personal account. My performance on this website - about flat since May - is pretty illustrative of my real-world performance in that time. Basically, I took the brunt of the March selloff, sold out, and missed the rally.  I am re-evaluating what to do, frankly. I've never felt this wrong. I don't think that I am wrong - and that's a problem. Look... I'm a serial starter of things like this. I've started 5+ blogs over the years. I've started a few YouTube channels and let them subside. Besides my family blog that I started in 2016 and is st...

Happy Thanksgiving. Life has been crazy. Updates to come. 

Janet Yellen is Biden's pick to lead the Treasury? Oh, dovish world... No time for a real note this morning. Life is accelerating right now. I made a few trades yesterday - will write summary when time permits. Likely no live trades shared today either.  Will report back tomorrow. Good luck out there.

Futures are up on vaccine distribution hopes - specifically that the vaccine will be distributed much faster than initially expected. We might need that speed with so many people traveling over the weekend ahead of Thanksgiving...and the virus potentially spreading even more out of control. I'll try to navigate all of this while trading profitably again this week.  __________________________ 1) What could possibly go wrong? - short interest is crashing... 2) Are real estate leases slowing because of covid and is it temporary or permanent? 3) Pay policy and location choice: __________________________ I'm hunting this morning for my first trades and also looking for a few puts to sell. I'd love a few ideas. Finding decent trade setups isn't too hard - it's finding puts that's a bit harder these days. LONG BOOK SHORT BOOK Ticker Cost Basis Size Ticker Cost Basis Size AY 30.21 2% DUK 88.04 2% AMT 241.36 2% CCI 166.54 2% AGR 48.72 4% CMS 63.12 1% PCG 12.26 1% QQQ $29...

Oh, man! I had a pretty solid week of trading and put-selling last week - up 114bps on the week if I count my puts and day trades. That's pretty epic. And I'm very heavily in cash right now - so don't need the market to open up on Monday to try to do it again. This week is a short week for trading given it's Thanksgiving week. So the market will close early on Wednesday, be closed Thursday, and close early again on Friday. Actually, it might be open a full session on Wednesday... Anyhow, I think the way I've been trading - with buying a stock or two that gaps up right away in the morning as my first trade or two then making a bigger, index trade in the afternoon is a good strategy for me. It seems that a company or two is always gapping up - and I just need to make a quick 1-3% on a trade to be successful. I don't need a trade like I had on Friday where I caught a 12% up move and it could have easily been 20% had I really got out at the wave's crest.  Sellin...

**FINAL DAY TRADE 11/20/20 & RECAP** Sell FUV @ $17.24 Realized gain of $1.87 (12.19%) Wowza! I caught that damn wave and rode it with all my might! I have no clue what the company does, but the chart was a great setup.  12.19% x 2.5% = 30bps! Total for the day: +23bps Total for the week: +114bps! Helluva week, team.  I'm out of capital and out of here for the day. Enjoy your weekend!

**FINAL DAY TRADE 11/20/20** Buying FUV @ $15.37 2.5% position FUV was up nearly 60% yesterday, opened down 15% this morning and has rallied back. If it can break above yesterday's high, it could run up quite a bit. Highly speculative trade here, but I'll keep a tight stop to ensure my week stays amazing.

**DAY TRADE #3** Selling TNA @ $48.65 Realized gain of $0.07 (0.14%) Breakout failed this time. I'll take my small win as a success. Remember, I'm just trying to catch a wave. Most waves crash. Surfing is hard. So getting out with small gains and losses is pretty acceptable so long as you avoid big losses and get a few bigger gains. 0.14% x 10% = 1bps Total for 11/20: -7bps Total for week: +84bps

**DAY TRADE #3** Buying TNA @ $48.58 10% position Buying here because a breakout from this level would mean new daily highs and pushing towards yesterday's close.

Buying AGR @ $46.64 Adding 2% 4% position I've waited patiently to add to AGR - and am getting a chance today with shares down over 5% from where I made the first purchase. To recap, AGR hired a killer new CEO from Sempra. I talked about it and said he'd transform the sleepy business. Then, they bought PNM - and put the first steps of his transformation into motion. It's a story that I completely agree with and understand. A great story and holding. 80% regulated utilities with 20% renewable power. And tons of grid upgrades for a very long time as the renewable energy transformation continues.

**DAY TRADE #2** Selling CIIC @ $17.28 Realized loss of $0.42 (2.37%) That's why we size random trades smaller than real companies... -2.37% x 2.5% = -6bps Down 8bps on the day :(

**DAY TRADE #2** Cover TSLA @ $497.54 Realized loss of $2.27 (0.46%) Taking the loss before it gets bigger. Market wants to rally right now. 0.46% x 5% = -2bps

**DAY TRADE #2** Buying CIIC @ $17.70 2.5% posiiton small trade on a company I have no idea what they do...

**DAY TRADE #1** Shorting TSLA @ $495.27 5% position Breaking the seal with a Tesla short.

Today is the big monthly expiration of options, I believe. So there could be some squirreliness at the close as big funds push stocks and the market to ensure their options expire where they want them to. Sometimes. So be careful as we approach the close. Always important on Fridays - especially Fridays with big expirations. I've had a pretty good week. I made 8.5bps on Monday, 1 on Tuesday, 52 Wednesday, and 13.5 yesterday. That's a total of 75 basis points! Throw in my ED & SO shorts - 11bps more. My puts on SONO, TGT, & NTES - another 6bps.  So I'm up 91 basis points, 0.91%, on the week. Locked-in. My long positions on CMS and PCG that I put on this week, along with the other longer-term positions haven't quite added to the gains. But investments like that don't have to work right away. Trades do. And being up 91 basis points on the week means I don't need to do much today to ensure a good week. I just have to avoid losses. So I'll trade small thi...

Selling TLT @ $160.32 Realized loss of $6.83 (4.09%) Taking the loss on the final piece of my TLT position. I'm doing really well with trading and the risk/reward of holding TLT isn't worth it at this point.  I still believe in the trade, fundamentally, but I've been so wrong on fundamentals and macro calls that I'm stopping myself out of those trades for a bit. This also frees up capital to trade.

Covering SO @ $60.86 Realized gain of $1.83 (2.92%) Covering ED @ $77.10 Realized gain of $2.17 (2.74%) When shorts make you a few percent in day, it's usually not a bad idea to cover and find new shorts. This is especially true in the world of utilities.

**FINAL DAY TRADE** Selling TNA @ $48.36 Realized gain of $0.12 (0.25%) Another trade today where it was up pretty impressively and came back to hit my stop. It's lower than where I bought it as I'm writing this, so that always makes me feel good. This trade added 0.25% x 10% = 2.5bps to my portfolio value. TOTAL for 11/19/20:  #1: 10bps #2: 1bps #3: 1bps #4: 2.5bps TOTAL: 13.5bps - 0.13% It's not quite the 52bps I made yesterday, but making more than 10bps in a day is amazing! Especially considering I'm trading just 10% of my capital.  This also doesn't include the puts I've traded profitably this week. Hopefully, I've stumbled upon a repeatable and sustainable way to invest that works for my circumstances and temperament.  I've learned a lot about trading, investing, and my abilities this year. It's cost a good amount of money in losses, but that's the cost of tuition in real life. Onward and upward from here.

**FINAL DAY TRADE** Buying TNA @ $48.24 10% position Using the final 10% of my capital to buy TNA - the 3x BULL of the IWM/Russell 2000. The VIX is falling, the tech shares are rallying, so I'm betting small caps join the fun. Stop will come along with the rising price.

**DAY TRADE #3** Selling SRNE @ $7.29 Realized gain of $0.03 (0.41%) Same story here as with LB. it was up pretty good - over 1% gain - before turning south and hitting my stop. There's a lot of resistance/support at the $7.25 level and it will have to deal with that gravity before breaking out - if it can. But I took my shot and will move on with my day. 0.41% x 2.5% = 1bps PLUS my gains from Trades #1&2 = +12bps on the day I have 10% of my capital left to trade.

**DAY TRADE #2** Selling LB @ $39.11 Realized gain of $0.11 (0.28%) This is an example of when to lock in gains sometimes, not just rely on your stop. Or to aggressively move up your stops. I've tried to let stocks run and breathe once their profitable instead of always locking in fast gains - I could have sold this at nearly $40/share - but was hoping  for a bigger winner than that if I let it breathe. It reversed from there and stopped me out with a small win. 0.28% x 2.5% = 1bps Plus the 10bps I made on Trade #1 = 11bps on the day.

**DAY TRADE #3** Buying SRNE @ $7.26 2.5% position This might round out my morning trades - hitting 10% of capital now. SRNE isn't gapping up, per se, but it's at a resistance level and could break above it. On volume too. So I'll tag along with a tight stop if the run fails.

**DAY TRADE #2** Buying LB @ $39.00 2.5% position Because I'm so capital constrained due to settlement issues, I've got to trade in smaller sizes to be able to have more trades in the day. So I'm trading another gap up stock - L Brands.

**DAY TRADE #1** Selling SONO @ $21.29 Realized gain of $0.41 (1.96%) Uggg!! By the time I got around to writing this, the stock has shot up after hitting my stop on a quick pullback. Oh, well. No crying in trading. Especially profitable trading. 1.96% x 5% = 10bps

**DAY TRADE #1** Buying SONO @ $20.88 5% position SONO is gapping up on earnings news on big volume. That's a classic day trader's buy signal, so I'll jump aboard..

Buying to Close SONO $15 11/20 puts for $0.03 Realized gain of $0.18 (1.22%) Heckuva put trade here. I *almost* traded the $17.50 put - which would have effectively made me long of the stock up to that price - but chose the safe route. Either way, I am happy with this trade. 

I made 52 basis points day trading yesterday using 30% of my capital. That's a KILLER day! In all reality, I should have made more because I should have used more capital on the PCG trade. When a company you know well shows a trading signal that fits your criteria - and you know why it's up - that's a great time to make a huge bet. On Tuesday, I made 1 basis point and on Monday, I made 8-9 basis points. So I'm up about 60+ basis points on the week by recycling my money, trading just 20%, and being only just 20% gross invested. The market can go up or down overnight, and I won't be hurt. It's almost a cheat code. It looks like I could have held my NTES puts and made more money, but that's ok. I closed them yesterday with the stock lookin weak and the cushion between my strike and the spot price not large enough. SONO had a blowout quarter and shares are flying - so that put trade will be closed and highly profitable this morning. I've got just 20% of capi...