I know my trading inactivity makes it less fun for readers and followers, but, it's what it is. I hate over-trading and over spending in commissions when I see no clear opportunities. Over time I have learned the hard way to appreciate importance of patience in traiding.
Market conditions
(Click on image to enlarge)
McClellan: +20 (neutral)
63% of stocks are trading above their 20 Day Moving Average (neutral)
Again, no man's land. I won't enter any new trades at this point and I'm happy riding what I already have on.
September Positions
RUT 980/990 Bull Put Spread. TOS says that this position now has a 100% probability of success. Well, it is true that it is 15% below current RUT price and that there are only two weeks left to expiration. But I tend to not believe 100% numbers in trading. The market corrected 20% in just one day on Black Monday, 1987. So, there you have it. Anything can happen. But in spite of that, this position looks very safe by now.
SPX 1815/1820/2065/2070 Iron Condor. 88% probability of success with 13 days to expiration. The Call side is safely above the upper end of the up trend channel.
October positions
RUT 1020/1030/1230/1240 Iron Condor RUT's trading at 1170. The position is now showing an 80% probability of success with 41 days to expiration and it is making money +4% or ($63 dollars on a $1668 margin). A lot of fight left here and the Call side is not totally safe, but I'm happy riding this baby for a while.
Action plan for the week
Nothing to do to September positions.
As for August, if RUT hits 1205 - 1210 my short Call (1230) will reach the 30% probability of being in the money. If that happens, I'll be closing the 1230/1240 spread for a manageable loss and will redeploy capital with the 1260/1270 bear Call spread. I think it is unlikely for RUT to hit 1205 this week. That's a 3% run up from current level and although anything is possible, I think it is unlikely in just a week.
As for new trades, only if we reach a short term extreme. A 3% move up or down would get me interested, but like I said, that is an unlikely number for just a week. So, I may not do anything at all in the end once again.
Forex
The LT Trend Sniper System is still be 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 1.2950, that is a 443 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 5.32 times the original risk specified for the trade. So, a portfolio growth of 15.97% by just following this one trend. After the huge down day the Euro had on Thursday, it is very unlikely to see an 8 day closing high. If the EA exists the trade, it will be due to the lack of progress condition after 8 days without making a new low. To sum up, I think this position won't be closed this week.
Economic Calendar
Apparently a quiet week ahead with few important releases.
Sunday: Chinese Trade Balance, Exports and Imports
Wednesday: Chinese CPI and PPI
Thursday: US Federal Budget balance
Friday: US Retails sales, Michigan Consumer Sentiment, Business Inventories.
Good luck this week folks!
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