This was a tough week for me, where I adjusted my RUT 1080/1090 Credit Put spread down to 1055/1060 guaranteeing a negative result for April and I also entered a brand new position: a June RUT 920/930 Credit Put Spread.
Below is a chart of the SPX index. Still in a long term uptrend, but certainly approaching the lower end of the channel. That's pretty much as far as I go with technical analysis. The 100 DMA has been a nice buy opportunity the last two years. It was penetrated on Friday, let's see if the party continues. Yellow lines represent the short strikes of my SPX Iron Condor (1695/1700/1960/1965)
(Click on Image to enlarge)
McClellan: -149.83 (very close to oversold)
Only 21% of stocks are trading above their 20 Day Moving Average (oversold)
We're very close to an oversold extreme in the short term and due for a rebound any time now. Adding to that the fact that the VIX is above 17, it is a good time in my opinion for selling Credit Put spreads. If you are an Options seller and you haven't sold Puts already, you are a Communist, and you deserve to live in Cuba with a typical Cuban salary.
RUT 1055/1060/1280/1290 Iron Condor 6 days to expiration. 92% probability of success. RUT's currently trading at 1111, that is 4.59% above my short strike price (1060). That would be a pretty serious correction for one week. I think this will all expire worthless and I will forget about this bad girlfriend. An April expiration cycle to forget.
SPX 1695/1700/1960/1965 Iron Condor 80% probability of success, 34 days to go. No problems here right now.
RUT 1000/1010 Bull Put Spread Out of trouble. 90% probability of success.
RUT 920/930 Bull Put Spread two young a position to have anything to talk about. Entered yesterday.
Action plan for the week
Let the April RUT 1055/1060/1280/1290 Iron Condor expire worthless.
Close the June 920/930 Credit Put spread if the market rebounds and I get a quick 75% of max profit in this position.
Close the SPX 1695/1700/1960/1965 Iron Condor if I can get $300 for it (Max profit potential is $320). $300 would make me happy 5 weeks before expiration.
As for opening new trades, I think I won't this week. The opportunity is clearly selling Put spreads at this point and I have already done too much of that lately. Let's see if I can clean the house a little bit this week and start with an almost clean slate and take stress levels down to historical lows.
Monday: US Retail Sales
Tuesday: US CPI, Chinese Industrial Production and GDP
Wednesday: US Building Permits and Housing Starts
Thursday: Philly Fed Manufacturing Index
On a non-trading related note. This blog is now consistently getting 1000 page views per day, or 30 000 per month. The good part of that is, it increases my advertisement revenue, which keeps me motivated to keep blogging. The not so good part is, I receive more emails from readers. My apologies for not replying to each one of your emails on time. Right now, I am behind and still need to reply to like 20 of them. It eats part of my day, and I have a job (a very busy one), plus a girlfriend, plus friends and to make matters worse baseball season just began. Remember folks, I am a one man shop, so be merciful. My petition is: if you have questions that you feel others may have please add it in the comments section, so we can all participate. Plus our ideas would remain there, visible to everyone forever, which will potentially reduce the number of emails of readers asking the same question that I answered on an individual level before to somebody via a personal email. Also for basic questions,....like what is an Iron Condor or a Bull Put spread,............man, I don't want to be an ass but you can Google that and get your answer in 10 seconds. I love the communication, the feedback. I love having an increasing number of readers. But help me keep my mind sane so that at the end of the year, come December, the solid returns are there, which in the end is what we're here for.
Take it easy, but take it anyways.
Good luck this week my friends!
Check out 2014 Track Record