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BookingAlpha Option Trading Advisory

Saturday, July 2, 2016

Weekend Portfolio Analysis (July 2, 2016)

Good morning Infidels.

This is a weekly chart of the S&P500, Brexit included:
A dot in the Ocean. A picture worth a thousand words. Nothing else to say. Case closed.

Recent Trading Activity

- Initiated October insurance position on Tuesday.

- Closed SPX August 1750/1760 Credit Put spread for $800 gain on Thursday

- Initiated new August SPX Iron Condor on Thursday

Market Conditions
(Click on image to enlarge)
Stochastics: 81 (overbought)
McClellan: +142 (neutral)
Stocks above their 20 DMA: 56% (neutral)

No man's land at the moment. I already have two Iron Condors on, and obviously I'm not willing to add a third one. We are however, getting close to an overbought extreme. I suspect we can reach it this week on a quick jump to SPX 2,115 or 2,120. I would be happy to sell an August SPX Credit Call spread above 2,210, or a RUT one above 1,250.

It's great to be fully in offensive mode without having to make forced trades, just picking your own spots. If no overbought condition is reached, I'll simply stay put.

Current Portfolio

July SPY Long 169 Puts
Portfolio Insurance.

September SPX 1825/1800 Debit Put Spread + 1625/1600 Credit Put Spread
Portfolio Insurance

October SPX 1825/1800 Debit Put Spread + 1625/1600 Credit Put Spread
Portfolio Insurance

July SPX 1890/1900/2175/2185 unbalanced Iron Condor
2 weeks to expiration now. No concerns. This should expire for max profit.

August SPX 1890/1900/2190/2195 unbalanced Iron Condor
New position. 7 weeks to expiration now. Lots of baby-sitting ahead.

Action Plan for the Week

- Initiate August SPX Credit Call spread position if we reach an overbought condition. That's it. other than that, there is nothing to defend at the moment, and no need for more portfolio insurance.

- An oversold condition seems remote, but a 3 or 4% decline would get us there. I'll gladly sell an August RUT Credit Put spread in the low 900's if that scenario takes place.

As anticipated, the LT Trend Sniper went long Gold on Sunday again. It also shorted the Euro at the same time. Both positions are still in play.

The Gold position is making some money, as the entry on Sunday was at 1316 and Gold ended up the week trading at 1339. 

In the case of the EURUSD, the short was entered also on Sunday at 1.10047 but the currency pair rebounded and closed above 1.1120 this week. The stop loss is still a little higher at 1.1217, so, there's still fight to be fought here.

These are positions 5 in Gold (XAU/USD) and 4 in Euro (EUR/USD) this year. I expect at least 3 more, for a total of 12. So far, no clear, clean trend has developed in 2016, which is a little frustrating, but that can change in the blink of an eye.

Economic Calendar
Monday: American Markets closed for Independence Day
Wednesday: ADP Nonfarm Employment Change. ISM Non-Manufacturing PMI
Thursday: Crude Oil Inventories
Friday: Nonfarm Payrolls. Unemployment Rate.

Options Trading results: Up +2.77% YTD vs S&P up +2.89%. Portfolio 45% invested, 55% cash.
Forex Trading results: Down 3.05% for the year. Long Gold (XAUUSD) and Short EURUSD at the moment.

Have a nice weekend and Happy 4th everyone!

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Check out 2016 Track Record

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