Results: 7/7 kind of week
Higher errors, but directional hedges delivered big profits
Quick summary:
New survey is up & running - click here.
Last week’s performance was 7/7 correctly predicted
Errors were higher, but the puts delivered the largest weekly profit thus far!
We are up 60% in 2022 (😱) while the S&P is down 20% (bear market territory)
Welcome back dear subscribers! The competition is officially open for week 8 in Q2 2022. The updated leaderboard is available within the app. Get in, have your say on our 5 indicators and 2 stocks, take opportunity from our early info on price targets, and keep pushing for that $2000 prize!
Note: If you haven’t already, don’t forget to leave your email after you finish the prediction, so that we can send you early results on Wednesday - see the end of the post.
For all those new to the whole thing, watch this quick video guiding you through the survey, showing you all its features, and briefly explaining how the competition works:
Thanks for participating, and keep having fun!
Last week’s accuracy & precision
An all too familiar story by now. 7th week in a row that markets are going down, 7th week in a row that we are in the money and profitable based on BASON’s predictions.
Last week it was all about getting direction right. And we got it right for 7/7 of our indicators (a lot of 7s last week, ey?). All were predicted to end up lower than Tuesday’s close, except the VIX, obviously. But the extent of the decline was even larger than we anticipated, and it all started already on Wednesday, as soon as we sent the predictions to our survey users (leave your email in the app for this, after giving us the prediction - see below). S&P went down 4% on Wed, Dow 3.5%, and the NASDAQ 4.5%.
We kept hold of the puts and the iron condors through Thursday, and then when the sell-off continued on Friday, we liquidated the condor positions immediately and took a loss (the lower confidence interval was well breached), but we held on to the puts for a few more hours and then tweeted as soon as we sold them (a few hours later):
Massive win, that one!
By the end of Friday, a slight bounce-back rally happened, but not enough to bring us close within our confidence intervals for the DJI and the S&P, although it did lower the errors a bit.
Overall, the errors weren’t that big, particularly when taking into account the volatility of 7% for DJI and S&P (highest ever weekly range since we started the survey).
Profits: biggest weekly gain in 2022
You already saw from the pinned tweet above how we did on the puts. This was our play for last week, with half of our positions already delivering by the time the post went public:
We traded 10 SPY 20/05 iron condors, ranging from 392/393 to 408/409 (10 contracts) for $470 immediate gain. The lower interval was already pierced yesterday, so we’re at a loss here for now.
But that’s why we bought downside protection, one SPY 409 20/05 put for $7.44 per contract. It closed at $17.55 yesterday! That’s already a $1000 profit…
Similar play for DIA 20/05, where we traded the following iron condor: 317/318 to 327/328 (10 contracts) for $290 immediate gain. Also trading at a loss for now.
And also protected with one DIA 20/05 put at 328 bought for $6.15. It closed at $10.20 yesterday, so that’s a $405 profit….
In total we lost $285 on the SPY iron condor, and $310 on the DIA iron condor (slightly more asymmetric bet), which were more than compensated with the $1,926 profit from the SPY put and $1,335 profit from the DIA put.
In total we made a $2,666 profit, our biggest weekly profit since when we started BASON predictions for markets back in May 2021.
In terms of overall performance, here are the stats:
60.15% in 2022 (keep in mind, this is during a bear market)
235% compounded gains since the start of the survey in May 2021.
That’s $33,494 for an initial $10,000 portfolio.
The S&P500 is still delivering a negative return throughout the observed period, of -7% since May 2021. And it is down -20% in 2022.
…join the competition!
Participate in our survey competition regularly to get our predictions on Wednesday and take opportunity from our early info on price targets.
NOTE: Remember, by participating in the competition and leaving your email in the user profile, you get our predictions before everyone else (on Wednesday after the markets open). Leaving your email is the only way for us to contact you. If you want it, ofc.
DISCLAIMER: This prediction survey is still in its testing phase. Neither the survey nor its results act as investment advice of any kind. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum bears no responsibility for your investment choices based on these predictions.
And, as always, don’t forget to subscribe to the newsletter!