Competition update 7/19/25

An explanation of what I am doing now and for the coming week.

As part of the friendly trading competition, I send a weekly update every Saturday explaining what I am doing and why. Here it is for 7/19/25:

My account value is $238,714.84 which is a minor fluctuation from the $240K start on July 1. Basically, I am positioned for a general market downswing but the market keeps going up. With only a small loss, this is not a problem because in the next couple of weeks I should get the gains I want.

Today the "Fear and Greed Index" is 76 for “Extreme Greed”, but I’ve seen much greater extremes, so the market run-up could continue. This would continue my small losses since I am positioned for a general market downturn in the next few weeks.

The market is due for a downturn and I am positioned heavily in SOXS and SQQQ ($153,017 and $40,326, respectively) with half of the positions in covered calls. Both SOXS and SQQQ have RSI's around 30, so they are due for an upswing. The covered call premiums give income but are a loss of opportunity if the general market swings down. However, half of the large positions will give good gains if the general market goes down. So I basically use the positions with low RSI’s for a weekly savings plan paying 1% - 2% interest and with low probability of going down more. Yet I capture the full upswing for half of the positions if the general market goes down. This is how I use correlated and anti-correlated stocks to position myself for gains in most general market conditions.

I sell double down puts for the positions with high RSI. For today, these are TQQQ, IBIT, and TNA. For the past couple of weeks, I have had a string of short puts in these positions that have been expiring worthless for good income. So now I only have 1 share of TQQQ, IBIT, and TNA, but on Monday I will sell 1 put for each. It is great that these weekly options pay high premium.

For mid RSI’s, I have NUGT with a 200 share position put to me at a loss. On Monday I will sell 2 puts to double down on the position (i.e. buy low). Doubling down with puts eventually gives a good gain when the stock reverses its decline. I get the cash to do this from selling part of my large positions which form my weekly savings plan. Again, these positions do not pay much but also can’t drop much more than they have already. And option premium keeps adding a little bit of cash, so I steadily and systematically “buy low”.

I use UVXY mainly as an indicator, and I have 1 share just for watching. The RSI for UVXY today is 34.46 which is not too low, but this RSI indicates a greater probability for the general market to swing down. Somewhat similar to the “Fear and Greed Index”.

I hope I am describing my general “DrF Payout” algorithm to you clearly. I should be able to show steady gains of $5K minimum ($10K typical) per month, but we will see.

My “DrF Buildup” algorithm involves putting $20 per week into the basket of correlated and anti-correlated positions for dollar cost averaging. I build up 1 share of the stocks with the lowest RSI’s first, because these have the highest probability of an upswing. At $20/week it takes a few weeks to build up 1 share of each stock.