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Saturday, April 25, 2015

Weekend Portfolio Analysis (April 25, 2015)

This week the SPX index went from 2084.11 to 2117.69 for a 1.61% gain. The market is now up 2.86% year to date. I entered the first position of the June expiration cycle ending a drought of 35 days without entering new trades. It has been a quiet year so far and hopefully it will continue to be so.

Market conditions
(Click on image to enlarge)
Stochastics: 89 (overbought)
McClellan: +39 (neutral)
Stocks above their 20 Day Moving Average: 60% (neutral)

No man's land territory and the long term uptrend channel is still in play. I will not sell Credit spreads until the market reaches an extreme. Obviously the overbought extreme is closer, we'll see if it happens. I want to see SPX around 2150 for me to sell Credit Call spreads on that index.

I currently hold no positions on the SPX, so today it makes sense to show you a chart of RUT and the support/resistance areas I am looking at.

(Click on image to enlarge)

May positions
RUT 1100/1110/1330/1340 unbalanced Iron Condor
3weeks to expiration, 90% probability of success. I'm not concerned with this position. It won't need adjustments this week.

June positions
RUT 1130/1140/1340/1350 unbalanced Iron Condor
This is the new position in the portfolio discussed two days ago, so nothing new to say here. Lots of baby-sitting ahead.


Action plan for the week
My two RUT positions are healthy and they won't need my attention for now.

As for new trades, I want to sell May SPX Credit Call spreads above 2205. For that I need about a 40 point rally on SPX from current levels. If this doesn't happen, then I will move my focus to June where I would like to sell Credit Call spreads above 2230. This can be achieved with a more realistic 30 point rally this week. So, SPX around 2150 will get me interested.

If the market stays sideways or goes down, I won't add new positions.


Economic Calendar
Tuesday: US Consumer confidence
Wednesday: US GDP and Pending Home Sales
Thursday: European CPI, Germany Unemployment, China's Manufacturing PMI
Friday: ISM Manufacturing PMI, Michigan Consumer Sentiment

Good luck this week folks!

Check out 2015 Track record



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6 comments:

  1. Last week:
    Monday morning - RUT @1258 and RVX @17. RUT in the middle of Bollinger Bands. 60 days to June expiration. I sold four iron condor spreads RUT June 1100/1120/1340/1360 for 2.70 (1.23 for 1100/1120 put credit spread + 1.47 for 1340/1360 call credit spread). Total credit received $1080 with margin $6920.
    Thursday afternoon - SPX @2118 and VIX @12.5. 57 days to June expiration. Despite SPX being at the top of Bollinger Bands, I still prefered selling a balanced iron condor (rather then selling more credit spreads than put spreads), because the price did not seem stretched enough to the upside. Therefore, I sold four balanced iron condors SPX June 1910/1930/2210/2230 for 2.50. Credit recevied $1000 with margin $7000.


    Open positions:
    4x IC SPX June 1910/1930/2210/2230
    4x IC RUT June 1100/1120/1340/1360


    Next week:
    I will monitor open position. Rough adjustment points are (2030;2150) for the SPX iron condor and (1190;1290) for the RUT iron condor spreads. Given the low volatility, these iron condors are pretty small (the current price of SPX is only 9% from the short put options and 4% from the short call options). It almost feels like trading split strike butterflies with the profit potential of iron condors.

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    Replies
    1. Iron condor sellers are making nice profits over the last few months. Thanks for sharing your trades.

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    2. Hi Martin,
      Thanks for sharing your insight.
      Do you happen to write on a blog or do you have a site? It would be interesting to follow you.
      Thanks
      LT

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    3. Hello LT,
      When I do a trade, I enter a few notes about the trade into the software that I use for tracking and analyzing my open positions. Apart from that I have an offline wordpress page where I keep my other notes that I find interesting. As I am not a native English speaker and I am naturally lazy, all my notes and comments are in my mother language that not many would understand. This is another reason why I don't have a regular trading blog.
      Martin

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  2. Another nice week for us conservative credit spread traders. I did not make any new trades last week. All current positions are safe and profitable except for the August 31 SPX 2275/2300 ccs that is showing a small loss. Here are the current positions:

    RUT June 30th 1000/990 & 1380/1390 iron condor - I hope to close this iron condor in early May
    SPX June 30th 1750/1725 cps - I hope to close this position in early May
    SPX August 31st 1750/1725 & 2275/2300 iron condor

    ReplyDelete