Results: never doubt the BASON :)
We closed positions in fear of war, but the BASON delivered
Welcome back dear subscribers! The competition is officially open for week 6 in Q1 2022. Last week’s 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)
Last week taught us two lessons:
(1) never doubt the BASON :)
(2) never trade on foreign policy news.
When Russia invaded Ukraine on Thursday the initial reaction in the markets was a major sell-off. The S&P opened 2.5% lower, NASDAQ 3% lower (this after a bad Wednesday to begin with). Our stop-limit orders got triggered immediately on market open on Thursday, and we faced a loss on all three positions.
We sent an email immediately on Thursday to our survey participants not to engage further and take limited losses as we have. We repeated the same message to all of our subscribers later during the day:
A SPY iron condor, 426/427 to 441/442 SPY 25/02, and given our directional prediction, we bought 426 SPY 25/02 calls. Also we got an iron condor for AAPL, 157.5/160 to 167.5/170 25/02.
Each of these positions triggered a stop-loss. Specifically, the SPY iron condor lost $120 (sold at $0.41, bought back at $0.53), the SPY call lost $334 (bought at 7.84, sold at 4.5), and the AAPL position lost $240 (sold at $0.62, bought back at $0.86). The total loss was therefore $694.
To make amends we will use what's left from our positions plus profits from before to buy put options today as soon as the market opens.
Instead of buying puts, we opted for selling calls (very risky, I know, which is why we advised strongly against it).
We did a very quick trade, selling 65 425 SPY calls at $1.06, buying them back at $0.9 an hour later. We made a $950 profit and eliminated all our weekly losses.
We ended up with +$256 last week. We’re up 4.4% in 2022, and 116% overall.
But then, a reversal:
Investors ultimately factored in the invasion as good news given that the Fed’s 50bps rate hike was now off the table. Expectations adjusted quickly and a market rally ensued.
We panicked on the news, disregarded those expectations, and although we still made money, could have had an even better week if we kept course and purely followed the BASON.
Eventually, its precision (for those predictions we crossed our on Thursday) was immaculate. And the revised targets, purely based on our panic reaction, nothing to do with BASON, were dead wrong.
Lesson(s) learned.
…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!