We started the week at SPX 2105.23 and closed it at 2071.26. The index is now up only 0.60% year to date, which makes most traders in the universe negative for the year. I continue to be pretty passive with my options plays and didn't do anything as anticipated in the previous portfolio analysis.
Market conditions
Horizontal yellow lines represent the boundaries of the March and April Iron Condors. Those are the points I don't want the market to reach.
(Click on image to enlarge)
Stochastics: 28 (neutral)
McClellan: -152 (oversold)
Stocks above their 20 Day Moving Average: 40% (neutral)
We're quickly reaching a short term oversold condition. Every time this happens you will be afraid. Every single time you will think it is different and the market crash is truly coming. Just remember that selling Puts is much better than selling Calls. You can go so much farther out. Be a little brave. True market crashes will only take place 2 or 3 times in your lifetime although you fear them every single day. I'm not selling Puts just yet. But if the market reaches an extreme this week I won't hesitate. That may happen with SPX around 2030-2040.
March positions
SPX 1845/1850/2170/2175 unbalanced Iron Condor
2 weeks to expiration and 94% probability of success. This fight seems to be won. No concerns.
April positions
SPX 1855/1860/2200/2205 unbalanced Iron Condor
6 weeks to expiration and 85% probability of success. Looking great. No concerns.
Action plan for the week
Existing positions will not need an adjustment this week.
I'm willing to sell March SPX 1945/1950 Credit Put spread for 0.30 credit or March RUT 1130/1140 Credit Put spread for 0.60 or better. There is always a chance that I'll chicken out with those strike prices in which case I will use April options. That will allow me to sell much farther out.
I believe we need a 1.5% - 2% fall from current levels to reach the oversold extreme I'm looking for. If the market trades sideways or goes up, I'll sit on my hands. I'm fine holding my two Iron Condors.
Forex
The short EURUSD position initiated on February 27 at 1.11972 made more progress this week. We are now seeing prices that hadn't been seen since 2003 and with the elephant bar of Friday it is hard to think that there isn't more downside left. The green line below represents the entry level of the LT Trend Sniper robot. Red line is the stop loss.
(Click on image to enlarge)
If price breaks support at 1.08, the next support area is around 1.0680, then 1.05 and after that it will be off to the races with the next support level below the 1.0000 parity level. If it goes there, which is anyone's guess, this would be a monster trade.
As it is right now, the portfolio is up +6.22% with this second trade of the year and +17.85% year to date. Of course this second gain will only be materialized once the trade is finally closed.
(Click on image to enlarge)
For live progress updates of this position you can always visit http://www.myfxbook.com/members/thelazytrader/lt-trend-sniper/1149379
Economic Calendar
Sunday: Chinese CPI
Wednesday: Chinese Industrial Production.
Thursday: US Retail Sales
Friday: US PPI & Michigan Consumer Sentiment
Good luck this week folks!
Check out 2015 Track record
Market conditions
Horizontal yellow lines represent the boundaries of the March and April Iron Condors. Those are the points I don't want the market to reach.
(Click on image to enlarge)
Stochastics: 28 (neutral)
McClellan: -152 (oversold)
Stocks above their 20 Day Moving Average: 40% (neutral)
We're quickly reaching a short term oversold condition. Every time this happens you will be afraid. Every single time you will think it is different and the market crash is truly coming. Just remember that selling Puts is much better than selling Calls. You can go so much farther out. Be a little brave. True market crashes will only take place 2 or 3 times in your lifetime although you fear them every single day. I'm not selling Puts just yet. But if the market reaches an extreme this week I won't hesitate. That may happen with SPX around 2030-2040.
March positions
SPX 1845/1850/2170/2175 unbalanced Iron Condor
2 weeks to expiration and 94% probability of success. This fight seems to be won. No concerns.
April positions
SPX 1855/1860/2200/2205 unbalanced Iron Condor
6 weeks to expiration and 85% probability of success. Looking great. No concerns.
Action plan for the week
Existing positions will not need an adjustment this week.
I'm willing to sell March SPX 1945/1950 Credit Put spread for 0.30 credit or March RUT 1130/1140 Credit Put spread for 0.60 or better. There is always a chance that I'll chicken out with those strike prices in which case I will use April options. That will allow me to sell much farther out.
I believe we need a 1.5% - 2% fall from current levels to reach the oversold extreme I'm looking for. If the market trades sideways or goes up, I'll sit on my hands. I'm fine holding my two Iron Condors.
Forex
The short EURUSD position initiated on February 27 at 1.11972 made more progress this week. We are now seeing prices that hadn't been seen since 2003 and with the elephant bar of Friday it is hard to think that there isn't more downside left. The green line below represents the entry level of the LT Trend Sniper robot. Red line is the stop loss.
(Click on image to enlarge)
If price breaks support at 1.08, the next support area is around 1.0680, then 1.05 and after that it will be off to the races with the next support level below the 1.0000 parity level. If it goes there, which is anyone's guess, this would be a monster trade.
As it is right now, the portfolio is up +6.22% with this second trade of the year and +17.85% year to date. Of course this second gain will only be materialized once the trade is finally closed.
(Click on image to enlarge)
For live progress updates of this position you can always visit http://www.myfxbook.com/members/thelazytrader/lt-trend-sniper/1149379
Economic Calendar
Sunday: Chinese CPI
Wednesday: Chinese Industrial Production.
Thursday: US Retail Sales
Friday: US PPI & Michigan Consumer Sentiment
Good luck this week folks!
Check out 2015 Track record
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