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Sunday, February 23, 2014

Weekend Portfolio Analysis (February 23, 2014)

The February 2014 monthly options expiration cycle is now in the past. The one position I had in February (RUT 1040/1045 Credit Put Spread) expired worthless for full profit resulting in a +1.08% growth for the model portfolio. The portfolio is now up +4.84% year to date.

Market conditions
SPX went from 1839.03 to 1836.25 this week for a negligible 0.15% loss. The GTC order on SPY that I left  never got triggered due to this market going no where.

(Click on image to enlarge)
Stochastics: 78 (neutral)
McClellan: +136 (neutral)
72% of stocks are trading above their 20 Day Moving Average (overbought)

We are not extremely overbought, but we are very close to that point. Due to this reason I believe the up side this week is limited as a 1% push higher would take this market to extremely overbought conditions. Selling Out of the money Calls at that point would be my way to go.

March positions
RUT 940/950 Bull Put Spread Very comfortable and way out of the money. Nothing to do here.

SPY 159/161 Bull Put Spread Also very comfortable and way out of the money.

March is the only month where I currently hold positions. And both are very safe. The trading stress level is down to its lowest mark this year.

Action plan for the week
I will enter the first April position this week. My candidate right now is the SPX 1660/1665/1920/1925 Iron Condor, and I would like a credit of 0.80 or better. If I have a hard time getting filled, I might try RUT 1010/1020/1250/1260 for 1.30 credit or better. These strike prices may change slightly if the market moves significantly or if I don't get my fill on Monday.

Also, if we go to extreme overbought conditions this week, I might sell an SPY 191/193 Call spread in the March expiration cycle. I wouldn't enter that position for less than 0.15 credit though.

As for managing the existing positions, there really is nothing to do as they look very safe.

Economic Calendar
Monday: European CPI
Tuesday: US Consumer confidence
Wednesday: New Home Sales
Thursday: Durable Goods orders, Initial Jobless claims, Fed.Chair Yellen testifies.
Friday: GDP, Chicago PMI, Pending Home Sales and Chinese Manufacturing PMI

Good luck this week folks!

Check out 2014 Track Record

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  1. I started my April position last Friday. I decided to go with IWM instead of RUT this time. IWM iron condor. 103/101 and 125/127 for .20 credit. Your plan for April looks sound. I think we are close to the end of this rally than the beginning of another major rally to 1900. I would be interested in selling a credit put spread in RUT if it can get down to 1120 in the next couple of weeks.

  2. Was looking at pretty much the same SPX trade Friday, but decided to wait until Monday for a fill of .85
    I think 1850 will be a resistance level for a bit....