SPX went from 1958.36 up to 1988.40 this week for a solid +1.53% gain. I didn't manage any existing position and I opened the first one of the October expiration cycle: A RUT 1020/1030/1230/1240 Iron Condor that looks promising. There is nothing being threatened in the portfolio, and it's a time of joy at the Lazy Trader's home.
Below is a chart of the SPX index. This time I projected the uptrend channel until the end of this year (2014). I rarely ever do something like this as my trading is independent from my ability to forecast future market moves. This was more out of curiosity than anything, seeing how not even August (one of the historically weakest months of the year) can't seem to take this market down. It occurred to me, "hey, where could the market end this year if the uptrend channel is not broken to the downside?"
(Click on image to enlarge)
But this is not "LT's market predictions?". This is not the site of a Guru pretending to know where the market is headed. That's not why you come here! So, let's get back to business.
Stochastics: 94 (overbought)
McClellan: +95 (neutral)
69% of stocks are trading above their 20 Day Moving Average (neutral)
If you are in pain shorting this market, getting burned on some options close to the money, I hate to say there's more upside room. I don't know if this thing will keep going up. Nobody knows. But I do know that two crucial indicators are not showing extreme readings yet. So, this thing still has room to go before a pull back takes place. At this point I wouldn't sell Calls, nor Puts either. Reason why, in all likelihood, I will do nothing in the next few days.
RUT 980/990 Bull Put Spread. "Oh the Lazy Trader is lying! He's full of crap! How come he always has this super easy to ride positions taking no heat at all ??!! wa-wah-waah".
SPX 1815/1820/2065/2070 Iron Condor. "No seriously. This can't be possible. Look at those strike prices". Ok, I better stop being cocky. 88% probability of success on this Iron Condor and no heat in the horizon.
RUT 1020/1030/1230/1240 Iron Condor This is the position entered on Tuesday. RUT moved sideways this week so there's nothing interesting to say about this position.
Action plan for the week
Current positions are looking great and won't need my attention.
I'll be waiting like a sniper for the perfect opportunity. I would like to sell an October Bear Call spread on SPX above 2080, with 90% probability of success and at least 0.50 credit. For that to happen, I would need the index to move about 20 - 25 points up. That's not impossible. That's barely a 1% - 1.2% move up, less than what took place this week.
Now, on the way down, I will be hesitant to sell Puts. I need a 3 percent fall or something like that.
If none of the two scenarios described above take place, I'll be happy doing nothing. That would mean the market hasn't made significant moves and therefore I'd be making money on theta decay with the existing positions. No need to rush trades that are less than ideal at this moment.
The LT Trend Sniper System it's still killing it. Still riding the short EUR/USD position initiated on July 17. This is the kind of monster moves for which I designed this robot. I want to start using it with real money in 2015.
The trade is showing a +10.04% gain (that's a +10.04% growth for the whole portfolio in a position where max risk was only 3%)
(Click on image to enlarge)
If you're interested in the progress of this trade, you can follow it live at http://www.myfxbook.com/members/thelazytrader/lt-trend-sniper/929036. Scroll down to the Open Trades tab.
Monday: New Home Sales
Tuesday: Durable Goods Orders, CB Consumer Confidence.
Thursday: GDP, Pending Home Sales
Friday: Europe CPI, USA Chicago PMI
Good luck this week folks!
Check out 2014 Track Record