Trading Update: 24 January 2015

True Profits Earned in 2015 to date: -US$4,588.16
All-time maximum profit earned since 2011: US$135,976.98
Current drawdown from all-time maximum true profit earned: US$7,864.26
Change from last update: Up US$7,753.64
Directional stance: Portfolio is 63.51% bullish

Again, let's recap what I said last week, and what has happened since this week:

Last week

The breather that the S&P 500 is taking is proving to be longer and deeper. The S&P 500 took that frolic and detour into the 1990s and decided to linger a while more, and even toyed with the 1980s. That frolic and detour has caused the portfolio, which was positioned very bullishly at 60+%, to suffer a larger drawdown. The maximum drawdown experienced this week was at the close of markets on Thursday, at US$22.5k.

However ironically the technicals do not seem to warrant that bearish scenario that I highlighted (i.e. a downtrend that could head to under 1800). That scenario is currently off the table and so it is just a matter of seeing where and when this little frolic of S&P500 wants to end. It is very possible that the frolic ended on Thursday at 1988, or it could go on down to about 1950, so we shall see. It's a bit like getting the flu (I've got one since 2015 began (does my health mirror the markets or what?), but I've had no other symptoms since Day 3 of my flu, save for a lingering cough that refuses to go away for good. That's a bit like downlegs in a bull market - they end when they want to end, you just have to wait it out and let them run their course. So downlegs in a bull market = the flu.

This week

Markets: There is a good chance the S&P 500 has bottomed at the 1980s, and we are in the next bull leg that will take us to 2200+. There is an outside chance that the move from the 1980s to 2060s was a dead cat bounce within a larger correction, and the S&P will hit the low 1900s before bottoming for the move up to 2200+. 

Portfolio: The numbers for the portfolio are looking better this week as the S&P 500 bounced to the 2060s before taking a breather last night. From the portfolio's perspective, the leg bull leg up should put the portfolio into the green. At 60+% bullishness, the portfolio is primed to profit from a bull leg. If we see a further correction down to the low 1900s, that would mean for short term pain for the next two weeks or so before we see "green shoots" in the portfolio. 

Nobody likes to be in the red in your first month of trading but I'm still looking to have good year here. I just hope that the saying "As goes January, so goes the year" does not come back to haunt me. As things stand, if the portfolio's performance in January is repeated throughout the year I will be seeing annualised losses of over 16%. Let's see haha.

Off-topic (Health Matters): And finally I reserve a little luxury of space to bitch about life outside the trading world. As I mentioned last week, I've been sick since the new year and was coming close to finally declaring a victory over the flu late since last week until it decided sometime this week to relapse, causing me to hit new lows (like the S&P500) flu-wise. My nose ran and ran like the Ganges River, and well it looks like there are other bloggers I follow who have been sick since the start of this year as well (misery loves company!). I actually had to see the doctor on back-to-back days because my symptoms morphed like Mystique (on certain days the nose decided to take centrestage and on certain days the cough went crazy on me). Finally after I acquired VIP status in the clinic, the doctor got exasperated and told me: "Your flu is taking too long to recover. Now I am going to treat it very, very aggressively." That was music to my ears and I have been the super drowsy meds he prescribed me as I have been sleeping like a baby the past few nights. Now the nose is much drier and my cough reduced, and hopefully like the S&P 500 I can make a rebound to new highs (health-wise) this year. 

Sick.. of being sick

Truly a reminder that without health, you cannot enjoy anything, even if you have lots of money. Before we are forced to spend money to recover our health, why not focus our efforts on maintaining our health in the first place? Health is something that, when you have it, you tend to take it for granted, but it's only when you lose it that you realise how important it is. You ain't know what you got till it's gone. When we fall sick, our bodies are trying to send us a message and we really can't do worse than to heed it and give our bodies the tender loving attention that they demand.