Bubba’s Equity Portfolios Weekly Update 9/2/2023

The S&P 500 cash was up a big 110.06 points for the week. This caused some losses in all of the Model Portfolios, but we still have some long positions which help balance the portfolios.

Option premiums have collapsed and so has the VIX which are corellated. But history shows that a super-low VIX and low option premiums give way eventually to lower stock prices and far more volatility. We look for a large move to the downside and the setup for that is all but complete. However, our long stock positions will remain as they are until there is enough selling to change the algorithm.

There are no new trades

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.

New trade alert

NONE

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.