Bubba’s Equity Portfolios Weekly Update 9/30/2023

Two of the three Model Portfolios made money this week. The cash S&P 500 was down 30.93 and on a weekly basis, we had another week of lower lows and lower highs. This is an objective measurement of market action and we are in a clear downtrend. This downtrend will continue until buying comes in, but with most big-cap stock indexes nearing or on major support, the next big move may be a large haircut in prices.

Investors have not panicked yet, but with risk-free money markets paying 4.3%, there may be a crowd of people dumping stocks soon. The buy and hold myth that the market never goes down, should remember the sixty-one month bear market that lasted from 1937-1942. People sold stocks and they will sell again as history suggests.

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.