SPX moved from 1582.34 to a close of 1614.42 on Friday for a solid +2.03% this week. And nobody, nobody can tell me they can predict anything related to where the market is headed. Folks, we've been in this unstoppable uptrend for almost 6 months now! The more I watch this thing, the more convinced I become that predicting short term direction is a futile exercise.
I've redrawn the uptrend channel, disregarding the previous swing low. And the reason I drew it again, is because, well, we are still in this solid uptrend that only God knows when it will end.
(Click on image to enlarge)
The yellow horizontal lines are the short strikes of positions that I have in May and June expiration cycles. That's where I don't want the market to go.
Stochastics 85 (overbought)
McClellan +139 (neutral)
71.94% of stocks above their 20SMA (overbought)
63.61% of stocks above their 50SMA (neutral)
We're from neutral to overbought territory. Still some upside room, but the market quickly becoming too overbought. For this reason I believe another +2% week is unlikely. If SPX hits 1630 this week, it will be a good opportunity to deploy out of the money Credit Call Spreads.
May Positions
RUT 1000/1005 Bear Call Spread
The short 1000 strike price is still 6% above RUT current level. The spread's looking good by now and I won't touch it this week.
(Click on image to enlarge)
91.16% probability of success in the next 13 days.
(Click on image to enlarge)
SPX 1440/1445 Bull Put Spread
Very healthy at this point. Will be left to expire for full profit and no closing commissions. I'm not going to put a chart for this one, because the chart of SPX was already shown above and for this particular position TOS is showing 100% probability of success. Of course that's an approximation, nothing here is 100%. But anyways, with a short strike price of 1445, and the market at 1614 SPX would need to fall 170 points in 13 days. That's more than a 10% fall. I believe this position is very safe by now.
June Positions
SPX 1430/1435/1660/1665 Iron Condor
The short call strike (1660) is not a concern yet, inspite of the fact that the market is challenging new highs all the time.
(Click on image to enlarge)
A slight temporary loss, but nothing out of hand yet. 72.10% probability of success.
Action Plan for the week
May positions won't need to be touched this week. Or at least that looks very unlikely right now. The SPX June Iron Condor is also looking fine. It may need an adjustment but probably not this week. If SPX goes up to something like 1640, I will probably roll the whole position up, that is taking profits on the Put side, and a temporary loss in the Call side, and then getting new Credit for redeploying the Iron Condor.
Other than that, with RUT hitting 960 - 965, it is probably a good idea to sell June 1020 - 1025 Calls in June.
As for selling Puts, not at this point for me. I need a pullback for that. A meaningful one, at least 3%.
Economic Calendar
It's going to be a very light week in term of news and also with earnings season winding down.
Wednesday - Chinese CPI and PPI
Thursday - Initial Jobless claims, Continuing Jobless claims
Good luck this week folks!
Check out Track Record for 2013
I've redrawn the uptrend channel, disregarding the previous swing low. And the reason I drew it again, is because, well, we are still in this solid uptrend that only God knows when it will end.
(Click on image to enlarge)
Stochastics 85 (overbought)
McClellan +139 (neutral)
71.94% of stocks above their 20SMA (overbought)
63.61% of stocks above their 50SMA (neutral)
We're from neutral to overbought territory. Still some upside room, but the market quickly becoming too overbought. For this reason I believe another +2% week is unlikely. If SPX hits 1630 this week, it will be a good opportunity to deploy out of the money Credit Call Spreads.
May Positions
RUT 1000/1005 Bear Call Spread
The short 1000 strike price is still 6% above RUT current level. The spread's looking good by now and I won't touch it this week.
(Click on image to enlarge)
91.16% probability of success in the next 13 days.
(Click on image to enlarge)
SPX 1440/1445 Bull Put Spread
Very healthy at this point. Will be left to expire for full profit and no closing commissions. I'm not going to put a chart for this one, because the chart of SPX was already shown above and for this particular position TOS is showing 100% probability of success. Of course that's an approximation, nothing here is 100%. But anyways, with a short strike price of 1445, and the market at 1614 SPX would need to fall 170 points in 13 days. That's more than a 10% fall. I believe this position is very safe by now.
June Positions
SPX 1430/1435/1660/1665 Iron Condor
The short call strike (1660) is not a concern yet, inspite of the fact that the market is challenging new highs all the time.
(Click on image to enlarge)
Action Plan for the week
May positions won't need to be touched this week. Or at least that looks very unlikely right now. The SPX June Iron Condor is also looking fine. It may need an adjustment but probably not this week. If SPX goes up to something like 1640, I will probably roll the whole position up, that is taking profits on the Put side, and a temporary loss in the Call side, and then getting new Credit for redeploying the Iron Condor.
Other than that, with RUT hitting 960 - 965, it is probably a good idea to sell June 1020 - 1025 Calls in June.
As for selling Puts, not at this point for me. I need a pullback for that. A meaningful one, at least 3%.
Economic Calendar
It's going to be a very light week in term of news and also with earnings season winding down.
Wednesday - Chinese CPI and PPI
Thursday - Initial Jobless claims, Continuing Jobless claims
Good luck this week folks!
Check out Track Record for 2013
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