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BookingAlpha Option Trading Advisory

Sunday, June 23, 2013

Weekend Portfolio Analysis (June 23, 2013)

I opened the following Iron Condor on Friday but didn't find the time to blog about it that day.

Credit received: 0.95 (4 contracts per leg $380)
Max risk: 4.05 (4 contracts per leg $1620)
Days to expiration: 56
Probability of success: 70%

June expiration is now in the past and as you can see in the track record for June the last two trades expired for full profit, and the month resulted in a small loss.

Market conditions

The uptrend that I've been drawing for the last few months was broken this week.

(Click on image to enlarge)
Stochastics 23  (close to oversold)
McClellan -212 (oversold)
29.04% of stocks above their 20SMA (oversold)
45.24% of stocks above their 50SMA (neutral)

I believe this is a good time to bet on a rebound. At least a temporary one. But positioning yourself far away from the action, for some safety margin. With a VIX around 19 you can sell Puts for some good distance right now. I think we are close to a temporary bottom, but medium term, 2 - 3 months, the market wont be as strong as it was for the last 8 months.

July Positions

I should have closed one of the two July Bull Put spreads and sold Bear Call spreads before the market sell off. But,.....If I had wheels I would be a bycicle.
SPX 1505/1510 Bull Put Spread
With SPX at 1592 right now, this position is showing a 83.70% probability of success. Still not concerned here.

RUT 890/895 Bull Put Spread
With RUT at 963 there is a 87.54% probability of success. Still looking good.

Action Plan for the week

Obviously nothing to do on the August Iron Condor. It is just brand new.

As for July positions. Eventually, I would like to get rid of one of the Bull Put spreads and sell an Out of the Money Bear Call Spread in case of a 2% market rebound. I don't want to enter any more Bull Put spreads at this point. The next trade will have to be a Credit Call Spread. Probably in August exp.

On the Forex Front

Last week the LT Trend Sniper system was forecasting an uptrend in EURUSD and the prediction was right until Wednesday before the Federal Reserve meeting. In the end the trade resulted in a manageable loss and the system is showing a -0.92% performance this year. Not bad as this system is a trend follower and one good trade could save the whole year. There are 2 wins and 3 losses this year. The other three minuscule losses are manual trades I have been forced to enter and immediately close due to Metatrader's inactivity policy that disables demo accounts after 30 days without trades. But those little manual ones, but those little manual ones shouldn't be considered.

Economic Calendar

Tuesday: Durable Good Orders, New Home Sales
Wednesday: GDP
Thursday: Initial Jobless claims

Good luck this week folks!

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1 comment:

  1. There is that 952 area of support again on the dail and we touched the 942 area of support and bounced. A bounce is due but it is a sellable bounce. I think so.