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Sunday, August 12, 2012

Weekend Portfolio Analysis (08-12-2012)

Boring week in the markets with slow movements and light volume being the central topic. The week resulted in 5 consecutive little green days that moved the S&P500 by +1%. Now, let's analyze the positions in the portfolio.

First the August portfolio:

The RUT 860/870 Credit Call Spread, looks really comfortable. With RUT at 801.55 as of this writing, it would have to go up over 7% before Friday. Something very unlikely. The plan is to let this one expire worthless for full profit on Friday.

The RUT 700/690 Credit Put Spread also looking really good. RUT would have to fall by over 12% by Friday in order to affect this position. Something unlikely. The plan is to let it expire worthless for full profit this coming Friday.

This is how the RUT Iron Condor looks, 5 days to expiration.

(Click on image to enlarge)

99.94% chance of successful expiration in the next five days.

As for the September portfolio, I mentioned last week that I would like to sell Puts if the market fell hard. That did not happen so I did not open new positions. On the other hand, I don't really want to keep selling calls because that would increase my upside exposure. That being said, the trade already open in the September cycle, the SPY 145/147 Bear Call Spread, has a temporary loss but nothing terrible. And just like I said before, I won't adjust it further up until SPY hits 144.80. As long as that doesn't happen I like to keep this bet as I still think, it is unlikely that we will hit SPY 145 by September.

Here's the position analyzed in ThinkOrSwim

(Click on image to enlarge)

This week, we will see a little more economic releases, the core of these releases being between Tuesday and Thursday:

Tuesday - US PPI, Retail Sales, Germany and France GDP, Great Britain CPI
Wednesday - US CPI
Thursday - Housing Starts, Initial Claims, Philadelphia Fed Survey

With that we might see a little more movement than the painfully boring market seen lately.

My personal plan will be to sell SPY Puts if the opportunity arises, with a significant sell off (-4% or -5%). If the market decides to keep going up, (and given that I'm about to get rid of the August RUT Calls) then I will start evaluating some Credit Call selling, probably QQQ 70/72 Vertical Spreads. But for that, I will wait until SPY gets closer to resistance around the 142 area.

Good luck on your trading this week!

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