August 11th, 2024
Lessons from Monday’s Market Bloodbath
Last week, I mentioned that August roared in like a starving bear. Full article here Little did we know that the bear would continue its rampage into Monday morning, leaving many traders panicked. I wasn’t spared from the carnage my account took a drawdown as well!
The cause? Speculation points to a Japan carry trade and some ETF inversions, but I don’t think this blog should focus on news, you can get there anywhere, and we can talk about that in GKT’s discord!
The real issue is how Monday’s savage market moves tested our portfolios. I talked about mentally stress-testing our strategies last week, and Monday turned out to be the real-world version of that test.
Look where we bounced… Right where I mentioned last week on the 50 weekly EMA? This isn’t about being me right or wrong; it’s about having a good gameplan while building your trading playbook:
What if we hadn’t bounced on the weekly 50EMA, what would your portfolio have looked like? If you haven’t read my article on moving averages and how I use them to trade, this is yet another example of why you should: read the full article.
I don’t know if we’re totally out of the woods here, what if we head down to the 100 EMA on the weekly?
These are the scenarios you need to be prepared for, mentally and strategically. For all I know we go back to new highs, that’s possible too. We can also chop around until the rate cuts and election.
THINK ABOUT IT NOW…
This isn’t doom and gloom—it’s reality. As I mentioned before the VIX spike, stress-testing your portfolio isn’t just a good idea; it’s essential. Trading is as much about mental resilience as it is about numbers. You need to be ready to buy more at lower prices, sell higher, and avoid getting liquidated when the market turns against you.
Is your account sized to withstand drawdowns? Everyone experiences them, even seasoned traders. My account took a significant hit, even with hedges in place. That’s part of the game, and it’s okay. It will recover, and I managed to profit as the market dropped. I was buying as accounts where getting liquidated. Selling puts and buying shares of dividend companies. Mr Money Maxwell Inner Circle members specific dividend stocks I like, you should join if you want even more of my insights, it’s less than $2 a week at the introductory price. Prices will go up next month.
The core philosophy at GKT remains the same: Trade often, trade small, and trade mechanically. No one knows if we’re heading for another pullback or all-time highs. Choose some indicators and tools to make a plan. I rely on moving averages, support and resistance levels, and years of experience, to navigate these turbulent waters.
Whether this was your first major drawdown or your tenth, learn from it. Don’t give up. I’ve been through countless market swings, and each one has taught me something new. I’ll continue to share these lessons each week, helping us all grow and improve as traders.
Your Turn: A Personal Request
If you had a key takeaway from Monday’s drawdown, I’d love to hear it—. Please email me and share your thoughts.
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If you want to support what I’m doing and gain access premium content, consider joining Mr Money Maxwell Inner Circle. Since this is a soft launch, you can get in at an introductory price 99.99 a year!
Navigating the Rate Cut: Soft Landing vs. Hard Landing
As we move closer to September, one of the biggest questions on every trader's mind is: What will happen when the Federal Reserve decides to cut rates? Understanding the potential outcomes will help us better prepare and position our portfolios. Let’s explore the basics of the two main scenarios—Soft Landing and Hard Landing—that we might face in 2025.
1. Soft Landing: The Goldilocks Scenario In a soft landing, the economy continues to grow, but at a slower, more sustainable pace. Inflation eases off without plunging into a recession, and unemployment stays low. This is often referred to as a “Goldilocks Economy”—not too hot, not too cold.
a. M$M Inner Circle members- check your email for the trade ideas.
2. Hard Landing: The Recession Risk The hard landing scenario, on the other hand, is more severe. Here, rate cuts signal that the economy is entering a recession. Growth slows significantly, unemployment rises, and inflation risks turning into deflation.
a. Mr Money Maxwell Inner Circle members get my trade ideas!
What’s Next? Understanding these scenarios helps us make informed decisions as we move closer to the Fed’s rate cuts. While a soft landing offers the potential for continued gains, a hard landing requires more caution. If you’re looking to dive deeper into these market regimes and explore trade ideas and how I’m navigating them, I invite you to join my Mr. Money Maxwell Inner Circle.
3 Alternatives to Selling Naked Puts: Profiting from Pullbacks
Have you checked out my latest blog on strategies beyond naked puts? This week, I had some solid wins with put ratio spreads, as well as 1-1-1 and 1-1-2 put spreads. I write these blogs because I genuinely believe they add value to your trading journey. The strategies I share are the same ones that have brought me freedom and consistent income I enjoy today.
I hope you not only read the blog but also put these strategies to work and saw some profits.
For instance, my CAVA trade: I entered with an $0.85 credit, and after closing it, I walked away with $2.15.
The stock market doesn’t have to be complicated when you approach it with the right mindset and realistic expectations.
If you haven’t already, read the blog, follow my trades in Discord, and start making money. Let's keep things simple and profitable, team!
Index Updates
SPY- When we look at this week’s close and last week’s close this week ended up being was a wash.
I know it doesn’t feel like that, but it’s pretty interesting we basically closed the week where we ended the week before. Quite a bullish recovery, are we going to have a retest? Was this a major over reaction?
QQQ- Tech bounced right on the 50 EMA. Tech actually ended above last weeks close.
VIX- Volatility was the biggest story. This level of VIX hasn’t been seen since covid. This was the time to sell premium! That’s exactly what the Good Kids did.
IWM- small caps were hit really hard, do you notice how previous resistance acted as support? It’s SO important to pay attention to these things. Could you have bought there? Looks like people did.
TLT- Treasuries took a bit of a hit this week. Did you see that Warren Buffet owns more Tbills than the Federal Government, not exactly what TLT is, but still interesting.
GLD- inside week for gold, the 10ema is acting as support.
SPYD- Dividends held up pretty good this week overall. I’m still bullish dividend stocks.
Ex Dividends (Inner Circle Trade ideas)
Mr Money Maxwell Inner Circle members check your emailed copy for this week’s trade ideas! Not a member? Join now during the introductory sale for more trade ideas
Dividend Aristocrats:
Dividend Kings:
The week ahead:
We’re back to CPI and Jobless claims this week. Market will be looking for weakness in CPI and wants to see the strength in the job market as these are key metrics the Fed and Jay Powell monitor in relation to rate cuts.
Another week of earnings, not as many companies, but some interesting names:
This was a lot to type, I'm sure it was a lot for you to read. If you made it this far I appreciate you and hope it provided you value. Until next time!
Happy Trading Good Kids!
-$Maxwell
For more insights and real-time market updates, join our GKT community on Discord. If you need personalized help, schedule a 1:1 intro call using my Calendly link.
This is not trading advice, it's for your education. None of this is financial advice. Any trades or decisions you choose to make are at your own risk.
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