…did Investors just have one? As per statistics April was supposed to be a good month for the Markets but instead it turned out to be a worst month since Oct 2008…ouch! Now what? Sell in May and go away or stay the course and buy the dip or even better maybe invest in Kuber Gold instead?
One third of the year is gone and the Markets are down a whopping 14%. Tech is already in a bear market and S&P 500 wants to go to 3850 in a hurry which is another 6% from here. Markets go up in a staircase and takes the elevator down and this has been especially true for the current year. March showed some promise and tried to undo the beating from Jan and Feb but failed miserably at 4600, a strong resistance level. So far the Market has been in a range between 4100-4600 but looks like a breakdown is imminent given the aggressive Fed that is determined to do whatever it takes to control the inflation beast. So how are we surviving? Given the volatility, we are juicing the premium by selling calls and puts in this choppy markets. This helps in consistently adjusting our cost basis till the Markets are stuck in a range. In a nutshell, on the higher end of the range, we sell calls and buy puts and at the lower end of the range we sell puts and buy calls. Markets have been pretty oversold and a bounce is expected but not before a capitulation to the 3850 level. That will flush out the weak hands and a great time to sell puts and buy calls. Essentially, the calls that we buy are funded by the puts that we sell. But this needs to be done carefully and not indiscriminately and we do that by monitoring the Market technicals and the on-going geopolitical changes.
Investing in the markets so far has been a Fools errand this year but Option strategies have saved the day so far. If you would like to know more about how we do what we do, please feel free to contact us for a 1 hour free consultation with no obligation. Hope to. make hay in May!