Brook Reef

Closing Pair Trade of Long XLU vs. Short XLY Sell XLU @ $74.97 - realized gain of $0.72 (0.97%) Cover XLY @ $187.76 - realized gain of $1.60 (0.84%) Total Realized Gain: 1.81% Pair trades are a bit like black magic. You use zero money and make money. Like turning air into water or lead into gold. I would keep this position on longer, but can't resist the urge to lock in a nearly 2% gain in less than a day. I pushed my gross exposure up by 40% yesterday and this will pull back half of that.  I'm now sitting at 58% gross and 38% net. I'll be ready for the next opportunity!

PAIR TRADE: 10% each side Long BND @ $79.42 Short JNK @ $102.91 Boom! In 2 trades I've jumped my gross exposure up by 40% without affecting my net. That's how I play a VIX decline into market weakness. The idea on this trade is that credit spreads will rise as the economy weakens (by design) as the Fed raises rates to quell inflation.

PAIR TRADE: 10% each side Long XLU @ $74.25 Short XLY @ $189.36 My total positioning rules should be clear by now: when volatility spikes, I reduce my gross exposure. When it falls, I add gross. With the VIX below 20 and holding, it's a day to build up some gross exposure. My market view remains that we'll chop or trend downward from here in equities and rates will be downward, especially at the long-end as the Fed raises shorter-term rates into a sensitive economy. That said, buying utilities gives me rate sensitivity. And shorting consumer discretionary benefits if/as the economy slows. So this trade is in-line with my broad view. Utilities are cheap. If rates keep rising, the downward pressure on allowed returns will ease. If rates fall, the somewhat fixed-income stream of income will be worth more. But I'm a fanboy...

Selling DOCU @ $109.67 Realized gain of $2.42 (2.26%) Meme stocks are surging - so I'll take this chance to get out mostly unscathed on a bad trade (after doubling down lower). 

Selling EIX @ $68.64 Realized gain of $5.06 (7.96%) The latest wildfire in Boulder is a reminder that we haven't made ANY progress on mitigating risk of future fires. And while EIX and other utilities should be mostly insulated from the worst outcomes, it's not a good sign for population growth - even if the required infrastructure upgrades will benefit the utility. But in California, a state with already high prices, this is going to be a tough battle. EIX isn't cheap enough to justify holding here...and I'll own some in UTG.

Selling June 30, $380 QQQ Calls for $4.34 Realized gain of $0.98 (29.17%) I use options to give myself exposure when I'm not sure enough to act on the underlying. And to add juice to high conviction positions - but usually the former.  I bought 2 kinds of QQQ calls when it looked like the market was going to dump hard but I wanted maintain some upside. Now that it looks like the market wants to rally, the smart move is to take my profits and consider adding some puts to profit from a big move down - a counter-trend move. If tomorrow is another up day, I'll buy some puts. If not, I'll remain patient.

Covering AMZN short @ $2,971.56 Realized gain of $38.66 (1.28%) This wasn't meant to be a day trade, but the broad markets dumped after the Fed announced their rate increase and the press conference gave Powell the opportunity to get everyone bulled up. I don't know what can de-rail this market - but clearly rate increases and war can't do it. Be quick with your shorts and careful with your longs. The house of cards continues higher.