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Saturday, September 13, 2014

Weekend Portfolio Analysis (September 13, 2014)

25 days without entering a trade. Getting close to my personal record of 28. That's what being lazy is about. And from the bottom of my heart I can honestly say, I love it! I love the lack of stress that comes from having positions that just work, burning up that theta decay without pressure at all. I know some people promote active trading as the only way to "make it". I personally couldn't disagree more. Constant entries and exits without real edge, trading costs going through the roof and a market that barely moves. Stress, frustration. You have to detect when you are committing trading suicide. Nobody is forcing you to do it. Patience is, to me, one of the most important traits as a trader. Patience to wait for your perfect entry without fear of missing out. Patience to delay exits or take positions all the way to expiration in spite of seeing some floating profits available that you just don't take yet. Patience to adjust at the right time without chickening out too early. Patience, patience, patience.

Market conditions
SPX from 2007.17 down to 1985.54 this week for a 1.08% loss.
(Click on image to enlarge)
Stochastics: 38 (neutral)
McClellan: -158 (oversold)
40% of stocks are trading above their 20 Day Moving Average (neutral)

No man's land but close to an oversold extreme. I'll be ready to sell Puts any time in the next few days. Calls dangerous at this point.


September Positions
RUT 980/990 Bull Put Spread. Will expire for max profit this week.
SPX 1815/1820/2065/2070 Iron Condor. Will expire for max profit this week.

Solid month. YTD performance will improve to +17.88% on Friday.


October positions
RUT 1020/1030/1230/1240 Iron Condor 85% probability of success with 34 days to expiration. Starting to look comfortable now with RUT at 1160.
(Click on image to enlarge)



Action plan for the week
Let everything in September expire for max profit.

The October Iron Condor in RUT will not be threatened this week. It won't need my attention.

New potential positions! Ok. I'll sell Puts if  we go to a short term oversold extreme. That can easily happen with SPX below 1970 specially if it gets there early in the week. The next question is, which month, and which symbol.

An SPX Credit Put spread in September  October would be around 1820-1815. Beta weighted against RUT that is around RUT 1040. No, thank you. Too much concentration of risk in the same area. I already have a RUT 1020/1030 Credit Put spread in RUT (As part of the Iron Condor).

I'll go to November. I'll be happy selling SPX Puts around 1770 or RUT Puts around 980. RUT's looking more oversold than SPX, so I'll probably go with RUT.

In the event the market doesn't reach an oversold extreme this week, and rebounds instead, I'll go with a November SPX Iron Condor by Friday. For this Iron Condor I would be happy selling Puts around 1790 and Calls around 2090. As usual, trying to get .80 credit. We'll see what happens.


Forex
The LT Trend Sniper System is still riding the short EUR/USD position initiated on July 17 after a new 70 day closing low was made. Ever since the trade was open, the previous day closing price has never been an 8 day closing high. At the same time, no 8 consecutive days have gone by without the instrument making a new low. Those are the two exit conditions, and neither one has been met.

EURUSD is now trading at 1.2962, that is a 562 pip gain since the 1.3524 open. The stop loss had originally been placed 83.2 pips away risking 3% of the portfolio. That means the reward so far is 6.75  times the original risk specified for the trade. So, a portfolio growth of 20% by just following this monster down trend.The trade will be exited this week if by Wednesday EURUSD hasn't made a closing low below 1.2894 (lack of progress) or after Tuesday whenever a closing high greater than 1.29625 is made (possible reversal).


Economic Calendar
Tuesday: German ZEW Economic Sentiment. US PPI
Wednesday: European CPI, USD CPI
Thursday: US Building Permits, Housing starts, Philly Fed

Good luck this week folks!

Check out 2014 Track Record


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3 comments:

  1. “Patience is, to me, one of the most important traits as a trader.”

    I completely agreed with you. I think most people equate trading to a traditional job. If they are not trading everyday, they feel they are not making money or being productive. In my lazy way of trading, having patience to wait for the high probability trades is the most important factor in my ability to consistently make profits month after month. While the person who trades more often appears to be making more money, in the long run this person will end up with more stress and perhaps a smaller trading account than me. I compare the stock market to a casino. The more often you play at the casino, the more likely you will lose.

    “No man's land but close to an oversold extreme. I'll be ready to sell Puts any time in the next few days. Calls dangerous at this point.”

    If SPX hits 1950 this month, I will consider it to be oversold and I will be eagerly selling bull put spreads.

    “Solid month. YTD performance will improve to +17.88% on Friday.”

    Congratulations on a good year so far.

    “RUT 1020/1030/1230/1240 Iron Condor 85% probability of success with 34 days to expiration. Starting to look comfortable now with RUT at 1160.”

    I regret closing my October RUT 1230/1240 credit call spread prematurely 2 weeks ago. I wish I still had this position.

    “Let everything in September expire for max profit.”

    I am planning to do the same thing.

    “An SPX Credit Put spread in September would be around 1820-1815.”

    I think you mean October.

    “I'll go to November. I'll be happy selling SPX Puts around 1770 or RUT Puts around 980. RUT's looking more oversold than SPX, so I'll probably go with RUT.”

    I am not sure you can get good credit with RUT 980 right now unless RUT goes down to 1130 or lower. I am also eyeing those levels for RUT and SPX for my November credit put spread positions.

    “In the event the market doesn't reach an oversold extreme this week, and rebounds instead, I'll go with a November SPX Iron Condor by Friday. For this Iron Condor I would be happy selling Puts around 1790 and Calls around 2090. As usual, trying to get .80 credit. We'll see what happens.”

    That sounds like a good plan. I will probably do the same thing. We might have to get closer to 1800 and 2080 to get .80 credit by this Friday if we are still in no man’s land. I am hoping we will go down to an oversold condition because I prefer selling credit put spreads than doing an iron condor.

    What I did last week:

    Nothing. It was a very uneventful week for me. None of my current positions needed to be adjusted. No new trades made.

    My current positions:

    Sept IWM 103/101 credit put spread (going to let this expire next Friday)
    Sept IWM 98/96 credit put spread (going to let this expire next Friday)
    Oct IWM 95/93 credit put spread
    Oct RUT 1030/1020 credit put spread (was hoping to iron condor with credit call spread but it is too late now)
    Oct SPX 1725/1720 credit put spread (got a GTC order to close for 0.05 debit)
    Oct SPX 2075/2080 credit call spread (will adjust if SPX touches 2050 this month)

    You can follow me on Twitter @lienjonathan where I tweet my 90% probability credit spread trades in real-time for free.

    ReplyDelete
  2. Hey buddy,

    Yes, by September SPX Credit Put spread I really meant October. I already fixed it. Thanks.
    As for the potential RUT Put spread around 980,of course it doesn't yield a good credit right now. I meant, it would be my candidate if the market falls to a short term oversold extreme. A 2% fall in RUT this week, maybe less than that would put the NOV 980 Put at the 10% probability mark. And the 980/970 spread potentially around .55 - .60 credit.

    Thanks for sharing your trades.They all look pretty good to me.
    Cheers,
    LT

    ReplyDelete
    Replies
    1. I need RUT to fall below 1140 before I sell November credit put spreads in size. I am looking to collect around 1.00 in credit for my November put spread so I will probably do the 1000/990 credit put spread.

      Delete