Tip From the Geek March Recap – Breaking Even Is Better Than Breaking The Bank
Recap Of The Geeks March Tips And Trading
March madness was in full effect last month and I am not talking about the US college basketball tournament. I’m talking about a wildly swirling blend of factors fueling market speculation and volatility. The volatility was a double edged sword for me, slicing my tips into shreds but offering numerous additional opportunities I was able to take advantage of. On a purely tips basis I didn’t so well last month but when I factor in all the extra trades I made I at least managed to break even. Don’t forget, last month I upped my trade size to $500 and so far the increase has been successfully incorporated into my account; balance size is $15,500 with 5 trades open at the time of this update.
March is a long month and included 5 Mondays and 25 total tips; 5 each week. As mentioned volatility and trading ranges dominated by FOMC rate hike speculation, volatile oil prices, the tail end of earnings season and declining expectations for future earnings. Of those 25 tips I am ashamed to say that only 8 closed in the money. In my defense I was able to redeem myself by taking advantage of the volatility and the trading ranges to produce enough wins to break even, exactly. I made a total of 37 trades in February with 20 wins for a win rate of 54%. Total cost of trading was $18,500, total return on investment was $18,500 for a net profit/loss of $0.00.
Total Cost Of Trading = $18,500
Total Return On Investment = $18,500
Net Return = 0.0%
Monday, March 2nd
I should have known from the start that it was going to be a tough month when the first week resulted in 4 losses. I was thinking to far ahead and failed to take into account negative earnings expectations for the 1st quarter. A move by the PBC to support the Chinese economy had me thinking of global growth and not about the FOMC and rate hikes. And, while all of this was happening monthly macro-economic data suggested a rate hike would be sooner, rather than later. The only trade that profited was on the USD/JPY.
Monday, March 9th
I made some adjustments to my strategy this week as it had become apparent there was resistance in the equity market. The strong jobs report for February raised fears of a sooner rate hike even though other data points were still coming in week. Out of my 5 trades 3 of them profited this week including the SPX, gold and the USO. My trades on the Euro and the Yen suffered due to conflicting sentiment in the currency market and waffling dollar values.
Monday, March 16th
This is the week the Fed changed the statement. They took the word “patient” out of the statement while indicating that they were still patient. The seemingly schizophrenic stance the Fed is taking made it really hard to judge direction in dollar driven asset such as gold and the forex pairs. I was able to profit from two trades, gold and the SPX, but lost out on both my currency trades and on oil. Oil prices were another highly volatile market in March and impacted by supply/demand issues as well as several news/rumor stories.
Monday, March 23rd
This is the week after the Fed meeting and the week that 1st quarter earnings declines really started to get the markets attention. What got my attention is that I’d been having a bad month and really wanted to do better this week…. but trading ranges and rapidly shifting market sentiment caused this to be one of my worst weeks of the month, I only profited from one tip, the USD/JPY. Oh yeah, this was also Triple Witching Expiration on Wall Street which adds its own flavor of market volatility.
Monday, March 30
The last week of March did not bring an end to the volatility. If anything, it increased it. The end of March was also the end of a flat quarter for investors and sparked a round of profit taking and sector rotation. What it didn’t spark for me was profits because the signals were washed out by portfolio management inspired volatility and not underlying market conditions. Out of my five tips I only profited on one. Thank goodness I was spotted enough extra signals to make up the difference.