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BookingAlpha Option Trading Advisory

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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3 comments:

  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.

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  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....

    ReplyDelete