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Saturday, October 19, 2013

Weekend Portfolio Analysis (October 19, 2013)

Well, well, well,........the October 2013 options expiration cycle is officially in the past now. The final 4 positions expired worthless for full profits: RUT 1120/1125 Bear Call Spread (+$200), SPX 1780/1785 Bear Call Spread (+$280), SPX Bull Put Spread 1595/1600 (+$240) and RUT 970/975 Bull Put Spread (+$120).

This cycle was crazy, and it resulted in 9 trades, by far the most active month ever for me. 9 trades means there were a lot of adjustments to make, which for a credit spread trader usually means a bad month. But I am pretty satisfied with the result in the end as the model portfolio grew +1.87% overall after commissions.

The track record now reflects a +4.37% performance for the year. Seriously under performing the markets after a disastrous start back in January + February, but with a nice recovery since then. The growth from the $8578 balance up to the current $10437 represents a +21.67% performance in the last 8 months, which is pretty solid. That being said, I still think achieving +10% overall return for the year is possible, and I will do my best to obtain that result or better.

Market conditions
(Click on image to enlarge)
Stochastics 99 (overbought)
McClellan +188 (overbought)
79% of stocks are above their 20 SMA (overbought)
78% of stocks are above their 50 SMA (overbought)

Price is also at the upper end of the channel. The upside at this point is limited and if we continue going up it will be in slow motion. I believe this week won't be so straight up as the past one. Chances for some sideways action or down moves are higher now. Although selling Bear Call spreads suck, this is a good time to do it. Out of the money without being greedy.

November positions
SPX 1565/1570/1800/1805 Iron Condor with SPX at 1745 this trade still looks good. The 1800 short Call is way above the uptrend channel. I'm not concerned here. 80% probability of success.

SPX 1520/1525 Bull Put Spread very comfortable position. Sure winner in my opinion.

RUT 1160/1165 Bear Call Spread opened yesterday, obviously nothing to be said here.

Action plan for the week
Not interested in doing much at these levels and with some positions already working. I don't think any of the positions will be threatened this week. I might close the 1520/1525 SPX spread for profits and wait for a pull back in order to use that capital in opening a Bull Put spread in RUT which would complete an Iron Condor. Other than that, I might start looking into December positions late this week or early next one but I have no clear plan on those yet.

Economic Calendar
Monday: Existing Home sales
Tuesday: Non Farm Payroll, Unemployment Rate
Wednesday: Chinese Manufacturing PMI
Thursday: Jobless claims, Initial Home Sales
Friday: Core Durable Goods Orders

Good luck this week folks!

Check out Track Record for 2013

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1 comment:

  1. You got a decent plan for the week. I am going to look to roll my RUT and SPX credit put spreads on any weakness this week. If we get a sizable 4% pullback on RUT and 3% correction on SPX this month, I will be looking to initiate my December credit put spreads. I might initiate half a position anyway in December credit put spreads because chances are we will just pullback 1-2% in the next few weeks. I am much more comfortable selling far OTM put credit spreads in this low VIX environment than trying to short a raging bull market.