Today I'm writing to you from sunny and awesome Orlando, Florida!
But this is not Henrik's traveling adventures! This is not about Henrik, the mundane Cuban Monopoly gambler. This site is about trading and the legit joy of seeing your capital consistently grow without the slavery of a 9 to 5 cubicle. So, let's get down to it shall we?!
(Click on image to enlarge)
McClellan: -42 (neutral)
Number of Stocks above their 20 Day Moving Average: 31% (neutral)
Neutral territory here but close to a short term extreme, which can be reached with a 1.5% drop from here. That'd be SPX around 2045. With the sell off seen on Monday my system almost reached an oversold condition but it didn't get quite there in all 3 indicators. With that elephant red bar, closing near the low of the day I was expecting some more downside the next day and it didn't happen. For this reason I didn't get to sell Out of the Money Puts. But strict technicality aside, for the more Bohemian trader, it was possible to sell something like the August SPX 1840/1830 Put spread for 0.60 credit or better which looked like a decently safe play. It was also possible to sell RUT 1160/1150 with July options expiring in just two weeks for 0.60 credit as well offering good odds down there.
The Russell index looks a little bit weaker by comparison but the lower end of the uptrend channel was very well defended on Friday.
I didn't pull the trigger waiting for more extreme pessimism with my indicators telling me there was still a bit more downside room. I don't regret what may seem like a missed opportunity now, because the fact that the market did not keep falling was good for my existing Iron Condors. You can always find some sort of joy with anything the market throws at you, provided you have been playing conservatively.
SPX 1935/1940/2220/2225 unbalanced Iron Condor
95% probability of success and 2 weeks to expiration. Looks like I won't have problems here.
RUT 1150/1160/1350/1360 unbalanced Iron Condor
70% probability of success with 7 weeks to expiration. No concerns on the Call side. I need to be careful about the Put side in the next few days should the market keep falling.
Action Plan for the week
I won't touch the July SPX Iron Condor
I will adjust the Put side of the RUT August Iron Condor in the event that RUT falls from its current price of 1248 to around 1225. If that happens, I will close the 1150/1160 Put spread for a loss and I will deploy a new Put spread in the 1080/1070 area.
If SPX falls to around 2040 - 2045, I will be a happy seller of the August 1825/1820 Credit Put spread for 0.30 credit or better.
If the market moves sideways or goes up, my time will be employed in writing up useless market quotes on Twitter.
Sunday: Greek referendum on bailout terms. (Expect the Euro to move violently)
Monday: US ISM Non-manufacturing PMI
Tuesday: US Trade Balance.
Wednesday: FOMC Minutes. China's CPI
Happy belated 1st of July to all my Canadian friends!
Happy 4th of July to my American readers!
Party hard and irresponsibly!
Trade sanely and responsibly!
If you are interested in a responsible and sustainable way of trading options for consistent profits, consider acquiring LTOptions, my options trading system revealed to the last detail.
Check out 2015 Track record