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Saturday, May 3, 2014

Weekend Portfolio Analysis (May 3, 2014)

The markets (SPX) went up 0.87% this week, from 1865 to 1881.14. It was an awesome week for me where I did nothing, nada, rien, zilch. I made a grand total of zero trades. Consequently I was able to have a life, be productive at work and on top of that I didn't read a single financial media article this week. I'm loving every minute of this "nothingness". Seriously.

The S&P500 is now up 1.7% for the year. The Dow Jones is down 0.4% and the Russell 2000 index is down by 3.3%. It's already May. If you are under performing this market, that means your portfolio growth so far this year is less than 1.7%. Consider buying SPY shares at the beginning of next year and forget about the markets. You will spend dramatically less in commissions; you won't be wasting your neurons day-in and day-out in front of a computer; you will be less stressed out and you will have a better and more fulfilling sex life.

Market conditions
Yellow horizontal lines below represent the short strikes of my May SPX Iron Condor and June SPX Iron Condor.

(Click on Image to enlarge)

Stochastics: 86 (overbought)
McClellan: +50 (neutral)
48% of stocks are trading above their 20 Day Moving Average (neutral)

No man's land here. The long term uptrend is still intact. I won't enter new positions until we reach a market extreme. Right now I'm more than happy doing nothing rather than entering directional trades where I see no edge.

May Positions
SPX 1695/1700/1960/1965 Iron Condor 95% probability of success, 13 days to expiration. It's pretty safe to say this will be a full winner.

RUT 1000/1010 Bull Put Spread  99% probability of success, like the girlfriend I never had (Can you imagine a 99% probability of success girlfriend?!?!)

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 79% probability of success. Like old wine, getting better and better as it ages.

Action plan for the week
No new trades for me.
The June SPX 1710/1715/1965/1970 Iron Condor is the center of my attention and it doesn't seem likely to be threatened this week. The rest of the positions are not a concern any more.

The May expiration cycle is shaping up to bring a solid +4% growth for the portfolio. June's also looking pretty good so far.

Economic Calendar
Sunday: Chinese Manufacturing PMI
Monday: US ISM Non-Manufacturing PMI
Tuesday: US Trade Balance
Wednesday: Chinese Trade Balance.
Thursday: US Initial Jobless claims and Chinese CPI

Take it easy folks.

Check out 2014 Track Record 

Go to the bottom of this page in order to see the Legal Stuff


  1. Hi Henrick,

    This market just seems to oscillate back and forth.....

    Was thinking of opening a July $SPY IC but see there is a dividend in June.
    Is this something I need to think about? Seems like if my short call is well
    OTM, no big deal....


  2. Nop.No concerns with dividends if your short options are not in the money.

  3. This is a funny post. Better sex? I agree with you about trading less. I think most people will do much better if they trade less and focus on other things besides trading. Life is too short to worry about credit spreads and what the market is doing.

    My current positions:

    May IWM 104/102 bull put spread
    June IWM 98/96 bull put spread
    June SPY 165/163 bull put spread
    July IWM 95/93 bull put spread (opened on Apr 28th when IWM was 4% lower than its 10-day high)

    I am hoping to hedge the July IWM bull put spread with a bear call spread if we get a decent rally this month. I am also looking to open a July SPY bull put spread in the next 2 weeks.

  4. Jonathan,

    I swear I was expecting your correction to any typo on the article. I guess I did pretty well this time!
    Nice. Your July position is a new one you didn't have last week. I think your positions are pretty solid and you must feel comfortable with them. Well deserved peace of mind my friend. Enjoy. Get ready for the Calls but only if we go to overbought territory, whatever that means for you.