2021-03-14 Sunday

WEEKLY MARKET OVERVIEW

After a few tough weeks bulls look to be back in control and pushing most indices to new all-time highs. Despite the overall market recovery, mega tech stocks (QQQ) are still lagging with money rotating in other areas such as industrial (DIA) and small caps (IWM), both exploding to the upside.

Next week will be crucial to determine if the worst is already behind us. With most indices in overbought territory, some sort of consolidation or minor pullback would be normal and acceptable. Anyway, if the first waves of selling will escalate again to panic, then we’ll need to be ready for a more defensive approach.

SPY
QQQ
DIA
IWM

Weekly performance (Week 10/2021)
– SPY (S&P500) +2.72%
 QQQ (Nasdaq100) +2.20%
 DIA (Dow Jones Industrial) +4.15%
 IWM (Small Caps) +7.29%

Volatility (VIX) falling sharply over the week and now back in the 20 range.

VIX

WEEKLY TRADING JOURNAL

Also for this week, my trading activity has been very minimal. Anyway, most of my shares are recovering and hopefully, soon I will be able to start selling covered calls against them. The only play of the week has been the covered call on V that expired in-the-money on Friday. I had to sell the stock at the strike price, breaking even on the capital gain, but keeping the entire $210 CC premium for a 20% AROI over 18 days. Overall not a great trade but finally I was able to free some capital and still generate decent returns.

V

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In case you have any questions, just drop me an email to info@thewheelstrategy.com

Take care and trade wisely

Gianmarco