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McClellan: +60 (neutral)
Number of Stocks above their 20 Day Moving Average: 43% (neutral)
There you have it. No man's land. Not my ideal scenario for individual credit spreads in one side of the market. In these cases I prefer to choose Iron Condors or simply stay put and do nothing when I already have positions on which is the case right now. Basically, for the next play I need an extreme mood to be reached first.
This is one of the hardest, yet underrated skills of a trader: Patience. Waiting for your ideal circumstances before pulling the trigger. Circumstances that may take a long time to show up and in the meantime, without trading, you feel that you are not doing "enough" to make your money grow. This usually results in "forced" trades with less than ideal entries, over-trading and letting commissions eat you alive. For long time readers of this site, you have seen me not make a trade in 30 days, 35 days. It's not that I love that. It's just the nature of the business sometimes. Awful for the blog, as there's no excitement, but it's the responsible thing to do with my trading style. I don't think I will spend that long without entering new trades this time around, but for this upcoming week it looks like I won't get opportunities. We'll see.
RUT 1350/1360 Credit Call Spread
99% probability of success, 3 weeks left. With RUT currently at 1238, this one should expire worthless in 3 weeks.
SPX 1925/1930 Credit Put Spread
99% probability of success with 3 weeks left. I'll ride it all the way to expiration date. Current SPX price of 2108 is almost 9% above.
September RUT 1120/1130/1330/1340 unbalanced Iron Condor
84% probability of success, 7 weeks to expiration. Looking very comfortable and making the Lazy Trader look like an old wise wizard.
Action Plan for the week
No concerns about August positions.
My September RUT position will need adjustments on the Call side in the event RUT reaches 1300. Adjustments to the Put side will be necessary with RUT hitting 1190. Both numbers seem unlikely for just a week of price action. I set up alerts on my platform to be notified just in case, but realistically speaking the probabilities are very low that I will need to adjust anything.
By the way there is a potential new downtrend channel forming in RUT, it is happening inside the longer term uptrend channel. There is potential for some resistance at the upper end of this down trend channel, which would be 1250 - 1255 for this week. On the way down we also have horizontal support in the 1205 - 1210 region. Those walls should keep my out of the money options safe for now.
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As for new positions, I would like to see an extreme sentiment once again. We may see extreme bullishness with SPX rallying about 3% from here, or extreme bearishness again with a small 2.5% dip. If either of those things happen, then I will consider new positions but those numbers are usually unlikely in a week.
Sunday: China's HSCB Manufacturing PMI
Monday: Germany's Manufacturing PMI + Europe's Manufacturing PMI. US ISM Manufacturing PMI
Wednesday: Europe Services PMI. US Services PMI. ADP Nonfarm Employment Change. US ISM Non-Manufacturing PMI
Friday: Nonfarm Payrolls, Unemployment Rate. China's Trade Balance.
Take it easy, but take it anyways. As usual, good luck this week folks!
Check out 2015 Track record