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Sunday, May 25, 2014

Weekend Portfolio Analysis (May 25, 2014)

I couldn't write a weekend portfolio analysis last week. I know many of you expected it, but sometimes life is just as random and unpredictable as the markets. I suddenly had a chance to go abroad and didn't have enough time to write a weekend article. In fact my flight was during the morning of Saturday May 17, which is the day and time where I usually write the Weekend Portfolio analysis article. Anyways, back in town, glad to see the markets barely moved.....I wonder if they will ever move again.....

Last week was May expiration and with it my two May positions expired worthless for full profit.
May was a quiet and solid month for the portfolio, bringing in a 4.11% growth. I'm now up +6.50% for the year.

This week the SPX Index went from 1876.66 to 1900.53, a pretty good week for the markets resulting in a +1.27% increase. The index is now up 3% year to date.

Market conditions
(Click on Image to enlarge)
Stochastics: 79 (neutral)
McClellan: +50 (neutral)
60% of stocks are trading above their 20 Day Moving Average (neutral)

We're in no man's land and I won't enter new trades until the market reaches an overbought or oversold extreme. If we don't reach it, so be it. I'm more than happy entering just one Iron Condor per cycle.

June Positions
RUT 920/930 Bull Put Spread 99% probability of success and well out of the money.

SPX 1710/1715/1965/1970 Iron Condor 85% probability of success with 26 days to go. With SPX at 1900 I think this position is not looking bad. At this very moment SPX would have to rally up to at least 1940 on Tuesday in order for the short 1965 Call to reach a 30% probability of being in the money. Obviously the market won't do that immediately, and in the mean time theta decay keeps working. It's very unlikely for this position to be threatened this week.

July Positions
SPX 1735/1740/1975/1980 Iron Condor This was the trade entered 2 days ago. There's not much to say here.

Action plan for the week
Both June positions are in safe territory for the upcoming week. The July SPX Iron Condor is very young so it shouldn't be threatened any time soon. All this leaves me open to entering new positions, but as usual, not at this time. I want to enter a credit spread, I don't care if a bullish one or a bearish one, but I need to see a market extreme. SPX 1920 would be a good point to start thinking about deploying out of the money Bear Call spreads. SPX 1840 - 1850 could attract me on the way down before selling out of the money Credit Put spreads. If we don't reach a short term extreme this week then I won't do anything.

Economic Calendar
Monday: US Markets closed.
Tuesday: Core Durable Good Orders, CB Consumer Confidence. ECB President Draghi speaks

Thursday: GDP, Pending Home Sales

Good luck this week folks!

Check out 2014 Track Record

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  1. Good weekly review. I have the current positions in IWM: May 30th 102/100, June 20th 98/96, Jul 18th 95/93. I would need IWM to get above 116 before I can sell some bear call spreads. I currently have no positions in SPY/SPX due to the low volatility. For me to sell more IWM credit put spreads would require it to go down to 107.5. On SPX, I would need to see it hit 1843 for me to sell credit put spreads.

  2. Good positions.
    You'll have better results this year Jonathan.