ChartMasterPro: Q1 2019 Trade Review

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Includes: ALB, CAT, HD, JPM, NEM, SPXL, SPXS, SPY, X
by: ChartMasterPro
Summary

Total gain of 69.74% on CMP Market Trend trades using SPXL/SPXS since Dec 12, 2018.

Total gain of 260.64% on SPY options trades (put and calls) since January 3, 2019.

Total gain of 76.87% of individual stock option trades since January 25, 2019.

After getting killed in December 2018 on too many individual stock option trades, I decided to take my foot off the pedal at the start of 2019 and ease up on the number of trades - go after quality rather than quantity.

I'm glad to report that my Q1 2019 numbers are very good - I made money on all three of my trading strategies: trading the S&P 500 via SPXL/SPXS, trading the S&P 500 via SPY call and put options, and trading individual stocks via call and put options.

I admit that I've been light on the individual stock option trades so far this year, but now that I have my trading feet back beneath me, the number of options trades on stocks will start to ramp up in Q2 2019.

Below is a summary of all my Q1 2019 trades for your review.

CMP Market Trend Trades

On December 12, 2018, I started using a new trade set-up to trade the S&P 500 both to the upside and to the downside - so far the results have been fantastic.

The trade model uses the NYSE Bullish Percentage Index to identify entry points for long and short trades on the S&P 500. I then use the Direxion Daily S&P 500 Bull and Bear ETFs (SPXL and SPXS) which provide 3x leverage on the trades.

This is a swing trading model, so I'm always either long or short the S&P 500.

I allocate 30% of my portfolio to these trades.

Since December 12, 2018, the trades have generated a total return of 69.74% (up to April 12, 2019). In comparison, the S&P 500 is up 9.65% over the same time period.

Here is my chart for the trade model with the bull and bear signals for the S&P 500 (blue and red arrows):

Below is a summary of each individual trade using this trade model:

CMT MARKET TREND INDICATOR

SP500 TRADES

TRADE

ETF

ENTRY

EXIT

% RETURN

LONG

SPXL

12-DEC-18

13-DEC-18

-1.64%

SHORT

SPXS

13-DEC-18

27-DEC-18

22.64%

LONG

SPXL

27-DEC-18

7-FEB-19

31.60%

SHORT

SPXS

7-FEB-19

12-FEB-19

-5.12%

LONG

SPXL

12-FEB-19

4-MAR-19

4.74%

SHORT

SPXS

4-MAR-19

12-MAR-19

-0.72%

LONG

SPXL

12-MAR-19

20-MAR-19

5.31%

SHORT

SPXS

20-MAR-19

28-MAR-19

2.64%

LONG

SPXL

28-MAR-19

CURRENT TRADE

10.30%

S&P 500 Options Trades

As of January 3, 2019, I've posted a total gain of 260.64% on my call and put options trades on the S&P 500. As of February 7, 2019, I started to buy SPY call and put options based on the trade signals generated by my CMP Market Trend Indicator.

I usually buy SPY options that are around four weeks to expiry for these trades, and the average leverage per trade has been approximately 25x for eight trades executed in 2019.

ChartMasterPro

2019 SPY OPTION TRADES

TRADE

OPTION

ENTRY

EXIT

% RETURN

LONG

SPY C 18JAN19 244

3-JAN-19

3-JAN-19

9.78%

LONG

SPY C 15FEB19 261

28-JAN-19

28-JAN-19

4.09%

SHORT

SPY P 15MAR19 272

7-FEB-19

12-FEB-19

-44.71%

LONG

SPY C 15MAR19 272

12-FEB-19

1-MAR-19

65.74%

SHORT

SPY P 18APR19 282

4-MAR-19

8-MAR-19

70.96%

LONG

SPY C 18APR19 276

12-MAR-19

18-MAR-19

49.74%

SHORT

SPY P 18APR19 288

20-MAR-19

25-MAR-19

62.36%

LONG

SPY C 18APR19 275

28-MAR-19

1-APR-19

42.67%

CMP Individual Stock Options Trades

I have to admit that I was a bit traumatised by getting caught on the wrong side of too many stock option trades in December 2018. It has taken me a while to gain back my confidence. I went back to the drawing board to review and test my trading model to make sure that the December mistakes don't happen again.

As a result of this pause and review, I only executed seven stock option trades in Q1 2019 - six winning trades and one losing trade (quality over quantity).

The total return on the trades was decent, but I know that I have to increase the number of trades going forward (ideally, I want to execute at least three stock options trades per week).

ChartMasterPro

2019 STOCK OPTION TRADES

TRADE

OPTION

ENTRY

EXIT

% RETURN

LONG ALB

ALB C 15MAR19 75

25-JAN-19

30-JAN-19

30.39%

LONG NEM

NEM C 15MAR19 32

25-JAN-19

30-JAN-19

1.97%

LONG HD

HD C 15MAR19 180

30-JAN-19

1-FEB-19

17.33%

SHORT JPM

JPM P 15MAR19 105

7-FEB-19

15-FEB-19

-50.62%

SHORT X

X P 15MAR19 23

8-FEB-19

6-MAR-19

2.31%

LONG HD

HD C 18APR19 175

12-MAR-19

20-MAR-19

9.89%

LONG CAT

CAT C 18APR19 130

28-MAR-19

1-APR-19

65.59%

VIX Trades

One trading strategy which I was not able to generate positive returns on was trading the Volatility Index (VIX). I attempted two trades on the VIX in Q1 2019 and both trades generated losses:

  1. Long trade on 01 Feb 2019 (VIX 15MAR19 35 calls) which generated a loss of 100% (expired at zero).
  2. Long trade on 03 Apr 2019 (VIX 17MAY19 27 calls) which generated a loss of 10.75%.

I will keep trying to get on the right side of the VIX movements.

Conclusion

It feels good to get a solid quarter of trading under my belt. My CMP Market Trend Indicator has allowed me to trade the S&P 500 with confidence. Now I just need to start executing successfully on individual stock options trades.

Disclosure: I am/we are long SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.