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Saturday, April 2, 2016

Weekend Portfolio Analysis (April 2, 2016)

I spent my hormonal prime (0 - 26 years old) in Cuba. During that time, I never had to give a hand to a friend or relative moving to a new place. Nobody ever moved. What for? better opportunities in a different province? pfftt. In my years in foreign lands, ages 26 - 33, I have probably participated in 10 moves. The last one of them, today. Just an hour ago. Let me tell you something: True friendships in this life, are defined during moves, not sharing drinks at a bar, or going to strip clubs together. No, no, no, no. When you are moving to a new place, summon your friends, and question the friendship level of those who come up with excuses. Because moves folks, moves are annoying and terrible, and nobody loves them. Everyone hates them, but they are a necessary evil in capitalist societies. Embrace the camaraderie and social bonding. Perhaps I have way too many friends to optimize my life to the fullest. So, although I expect no moves in a while, I know I still have at least 10 or 12 more ahead in this life. Suck it up LT.

But this is not LT's moving adventures?!?? This is not a site where you come for tips to a pleasant, enjoyable move?!?! This is about the vice. The greatest sport of all: The stock market. And what an analysis we have to make today.

Recent Trading Activity

- Closed Jun30 SPX 1520/1525 Credit Put spread for $1,240 gain on Tuesday.

Market Conditions
(Click on image to enlarge)
Stochastics: 84 (overbought)
McClellan: +39 (neutral)
Stocks above their 20 DMA: 69% (neutral)

Neutral, close to overbought. I was favoring the downside on the previous weekend analysis. It just makes more and more sense to me. However, I try to be pretty mechanical with my trades and not just randomly throw darts based on my hunches. So, even though I had a bearish bias, I didn't enter bearish positions or anything like that. As for right now, let's just say that, as the world turns more and more bullish with every uptick, I get more bearish. The same thing usually happens during market falls. I always feel the need to justify that it is not the end of the world. I've learned to be cynical when it comes to the stock markets. Anyways, still no man's land. But with too much exposure I won't enter new positions. I'll just focus on the defensive game.

Current Portfolio

May31 SPX 2125/2150 Credit Call Spread
27 deltas. What a fight this one has been. But it looks like we will lose it. The good thing is, this position was originally an unbalanced Iron Condor, a gain was taken already from the Put side, and the Call side was played with fewer contracts. That alone is a relief.

June30 SPX 2150/2175 Credit Call Spread
25 deltas. Adjustment point for the week estimated at around 2,090. I believe we won't see this number, but if we do, I will deploy a new 2225/2250 using full size.

July29 SPX 1650/1657/2200/2225 Unbalanced Iron Condor
Still No concerns.

July SPY Long 169 Puts
Portfolio Insurance

Action Plan for the Week
- To defend the May31 SPX 2125/2150 Credit Call spread, I will do something different this time: Buy May31 SPX 2150 Calls and sell 1875/1880 Credit Put spreads. LTOptions members will get a detailed description of this defensive strategy and all the possible outcomes as expiration approaches and the market moves one way or the other.

- To defend the June30 SPX 2150/2175, I will wait until SPX reaches 2,090 or so. If it does, I will take a loss and will deploy a new CCS with twice the number of contracts, using 2225/2250.

With these two actions, I believe the damage will be well contained.
It was a really tough quarter for the strategy. Perhaps the most challenging one I have ever faced.

Long EURUSD at 1.13403 this week via LT Trend Sniper robot. The trade has made some progress and the Stop Loss was already moved to half the original distance. The new version of the Sniper, released this week, incorporates Stop Loss trailing mechanisms which I have tested endlessly. The documentation has been updated to explain when and how the trailing mechanism works. If you have the first version, which doesn't have the Stop Loss trailing logic, shoot me an email, and I will send you the new one. Free. Deep down, I'm a good guy.

Economic Calendar
Tuesday: ISM Non-Manufacturing PMI. Services PMI
Wednesday: Crude Oil Inventories.

Options Trading results - With closed positions and trading costs included, we are down 0.39% for 2016. The S&P is up 1.41%. The portfolio is currently 38% invested, 62% in cash.

Forex Trading results - Up +2.68% for the year. Long EURUSD at the moment.

Good luck this week my friends!

If you are interested in a responsible and sustainable way of trading options for consistent income with solid risk management, consider acquiring LTOptions, my options trading system to the last detail.

Check out 2016 Track Record

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