Bubba’s Equity Portfolios Weekly Update New Trades 5/11/2024

The cash S&P 500 was +94.89 for the week and approaching a new high weekly close. The trend appears to still be up for many stocks, but we are still on algorithmic sell signals in others.

The VIX is about as low as it gets closing on Friday at 12.55. Volatility is nearly non-existent which shows investors are extremely complacent. History shows ultra-low VIX values often precede large down moves in stocks. So this coming week should tell us a lot.

The Model Portfolios had minor losses for the week. We are long some issues and short others as we mentioned above.

New Trade Alert

Reverse GLD to long (1A/2A/3A)
Reverse TSLA to short (1A)

We rely on price and only price and this accounts for our long term profitability. Simply go with the flow and you will prosper regardless of everything else that goes into what makes markets. Price is reality- not trader’s opinions or forecasts.

We never know the exact date when the drawdown ends and we re-start the profit motor and make new highs. If you are not in the market, you cannot expect to make a profit.

Amateur traders are always looking for the “why” in trading when they should only focus of the “that” because we don’t know whys- but we do know the that. If a market is making higher highs and higher lows, “that” is the very definition of an uptrend. We usually will never know “why” a market does anything. Most losers in the markets think they must have reasons for making a trade based on all kinds of subjective junk. Not us.

Our method is objective, and 100% rule based. There is nothing to understand other than what the algorithm is telling us. Follow the rules and make money- it’s that simple.

Here is the formula we use

For a Long Position
Buy the at the money Call
Sell a Put Spread starting with the at the money Put and using the recommended
distance for the Put Spread

For a short Position
Buy the at the money Put
Sell a Call Spread starting with the at the money Call and using the recommended distance for the Call Spread

ATM = At the Money
Long Put = Short Call Spread
Long Call = Short Put Spread

Remember the Groups are only updated once a week, although we have new trades during the week, changes to the Portfolios are only reflected on Saturday.