S&P500 Stocks Market bottomed!

Dear friends,

Its been awhile since my last post in May22 when I called bottom then, since then markets (S&P500) rose & peaked in mid of August 2022 before stumbling down to lower low, right at 200weeks Moving Average (MA).

& once again, another reversal has finally been confirmed at the close of this trading week.

On weekly chart (left, below), we can see a nice close above previous week's top in S&P500. This has coincided with triple bullish divergences in RSI, MACD-Histograms & MACD-signal lines which all ticked up at higher high despite a lower index low; thus indicating this bear is weaker & the upcoming upwave probably as strong as the last one May-Aug22 or possibly back to uptrend to 5k in 2023!

On the daily chart (right, above), yesterday's 2.37% rise had entered into value zone marked by 20days & 40days Exponential MA (EMAs). Some pullbacks might be expected, but for mid-long term investing (1-4months horizon or longer) it would be good to buy at any such pullbacks.

In terms of my portfolio, my realized profits year to date (YTD) is $37,369, yet to account for calls that expired yesterday, about $3114/month. However, even after accounting for the realized profit, my unrealized loss stand at -25.1% though after converting to SGD, the loss was lesser at -21.6% due to early pumping of bulk of capital into US TD Ameritrade account.

The biggest drag to my portfolio continues to be Alibaba (BABA) which had fallen new low just the past week though recovered slightly. Its funny as previously there was fear of falling ecommerce volume when China lifted its lockdowns nationwide, as people went into revenge shopping at physical stores. Now with periodic lockdowns at various cities, the market was bearish over the continuing Zero Covid policy. Nonetheless, I still maintained my holdings (800shares) at average cost of $187.50, after accounting for call premiums earned in the past 1.5year, my average cost is closer to $150 which is still doubled the prevailing price. However since its over allocated, previously at 50%, now after injecting of some capital in past year, its about 26% (see Morningstar portfolio view below). 

Although it shows I am 39% in cash, this cash portion are collateralized for the puts that I've sold. In fact, if a unlikely "armageddon"scenario if all my puts are assigned, it would cost 3.26x of cash in my account. Thus I am somewhat "stretched" in taking on new trades, however, if I do nothing to take advantage of the upwave (or possibly uptrend) ahead, I would beat myself for missing to ride this.

I am pondering between using bullish synthetic or buying bull call spread; or perhaps 1 contract of each to contrast how the profit/loss looks like. Though for a trade like this, I must remind myself a cut loss is compulsory as my portfolio could go belly up if the "armageddon" scenario do happens...

See how...

May the trend be with you...