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Sunday, March 10, 2013

Weekend Portfolio Analysis (03-10-2013)

This week SPX went from 1518.20 to 1551.18 for a +2.17% gain. This rally keeps defying the most skeptics out there, and boy oh boy,....this sustained trend is the most feared enemy of Iron Condor traders, credit spread traders and contrarian traders in general. How far can this thing go? I wish I knew folks. I wish I knew.

Here's the chart of the SPX as of Friday's close.

(Click on image to enlarge)

Stochastics at 96 overbought
McClellan at 108, not overbought but on its way to it.
72.06% of stocks are above their 20 SMA
72.86% of stocks are above their 50 SMA

The CBOE Index Put/Call ratio at 0.93 showing a pretty neutral reading but a little skewed to the bullish side. The Equity Put/Call ratio at 0.62 is showing a bullish extreme.

Last week we were in the middle of the uptrend channel, plenty of room to move either way. Today we are right on the upper end of the channel.

For the first time in a long time, we are getting to a bullish extreme. All the stars are not aligned yet, but the upside room is limited. I believe if we keep going up this week, it won't be another +2%, but rather a slow move all week, probably less than +1%.


Positions and Action Plan for the March expiration cycle

SPX 1445/1450/1560/1565 Iron Condor
(Click on image to enlarge)
 Probability of success at expiration has gone down to 64.62%. The short strike price of the Calls side at 1560 may be threatened this week.

If the 1560 strike gets to a probability of being in the money higher than 30% (currently close to that number), I will roll the whole Iron Condor over to April. That means I will close the existing one for a small manageable loss and will open a new one in April probably using the 1435/1440/1610/1615 strikes, and my goal is to obtain a 0.75 credit for this new position.

If the market opens weak, and retraces, I will be closing the 1560/1565 side hopefully for a breakeven in that particular spread. That means closing it for 0.35 debit or something around that number.

RUT 825/830/955/960 Iron Condor
(Click on image to enlarge)
 Probability of success down to 76.92%. The 955 strike price for this week looks in better shape than the 1560 for SPX. However, I will have to be careful with this position and have a plan in advance. If RUT goes up to 950 - 953 I will have to close the 955/960 Bear Call side and will redeploy an 855/860/985/990 Iron Condor in April. Hopefully for 0.75 - 0.80 credit.


Positions and action plan for the April expiration cycle

SPX 1375/1380/1580/1585 Iron Condor. Still looking good, only a slight loss at this point with a 68.04% probability of success at expiration. I believe I won't need to make any adjustments here this week.


Economic Calendar

Looks like we won't have those high impact news this time. Which reinforces my view of a slow week.

Tuesday - US Federal Budget Balance
Wednesday - US Retail sales
Thursday - US Initial jobless claims
Friday - European CPI, US CPI, Industrial production.

Good luck this week folks! Hopefully you trade better than I've been doing this year which has been terrible so far.


Check out 2013 Track Record

Related Articles:
Weekend Portfolio Analysis (03-01-2013)
March 2013 SPX Iron Condor
SPX March Put Credit Spread Roll Up to book profits
March 2013 RUT Iron Condor
April SPX Iron Condor
LT Trend Sniper - A forex strategy that works 

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