It's going to be a busy weekend between finding a place to rent and buying a car. I said to myself, if you don't write that article right now, you may not have a chance. So, here I am, getting it out, squeezing my neurons to the beat of Guns N' Roses in the background while I endlessly hit my keyboard. Let's get started.
April expiration is in the books my friends. It was a quiet cycle for me with only one trade: the SPX 1855/1860/2200/2205 unbalanced Iron Condor. That kid expired for max profit and the performance for the portfolio was +2.05% before commissions, +1.94% net after trading costs. Not spectacular, but decent. Not awesome, just nice. Better than nothing. The portfolio is now up +9.44% year to date. I have only made 5 trades in 2015 and I'm-not-mad-about-that. This is life! I'm on pace to a +28.32% annualized return and only 15 trades for the year. That would be my definition of paradise.
The SPX went from 2102.03 to 2081.18 for a 1% decline. The index is now up +1.08% year to date.
(Click on image to enlarge)
McClellan: -64 (neutral)
Stocks above their 20 Day Moving Average: 46% (neutral)
No man's land again and we're still in the middle of the long term uptrend channel. This consistent "no man's landliness" has been the responsible for my passivity this year. This is why I have played so few positions. Again, no individual credit spreads under these circumstances.
RUT 1100/1110/1330/1340 unbalanced Iron Condor
4 weeks to expiration, 91% probability of success. Starting to look really good. No sweat.
These is the only position in the portfolio, and it is very healthy. Trading stress levels back to almost all time lows.
Action plan for the week
The market had been struggling to reach an overbought condition and never really made it. Now we'll have to see if a short term oversold extreme is reached. If SPX falls about 2% during the week, I feel the indicators I follow will be lined up telling me it is time to sell Puts. So, SPX between 2030-2040 will get me interested. If it happens, I will be selling SPX Puts around 1900-1920. I will use May options for that.
By Friday we will be 8 weeks away from June expiration and I will start considering possible candidates. Right now, in this no man's land condition I am considering a 1090/1100/1330/1340 RUT Iron Condor. Now, I'm not too comfortable selling that 1330 Call in June and for that reason I would play it unbalanced. Half the size on the Calls. Of course prices will move from what I am seeing today and by Friday I may end up doing something totally different. In my ideal world we correct 2% early in the week so that I can comfortably sell SPX May Puts. Then we strongly rebound so that by Friday I can comfortably sell a RUT Iron Condor with a Call side hopefully above 1330. Time will tell.
Sunday: China's Trade Balance
Tuesday: German Economic Sentiment.
Wednesday: US Existing Home Sales. Crude Oil Inventories. China's Manufacturing PMI.
Thursday: German Manufacturing PMI, US New Home Sales
Friday: German Business Climate Index, US Durable and Core Durable Goods.
Check out 2015 Track record