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Friday, October 14, 2016

Weekend Portfolio Analysis (October 14, 2016)

The S&P500 index went from 2,160.39 to 2,132.98 this week, for a 1.27% loss. Year to Date the index is up 4.36% and it is currently sitting at the same price level that it was in May of 2015. That's 17 months ago. Cool.

Now, imagine if your pal LT was up 0% in the last 17 months.....[moment of reflection,...silence in the crowd]. You, and most sane people would have stopped coming to this site. However, the S&P can do it and we still follow it, worship it, look at it every day. It's the unjust world we live in.


Recent Trading Activity

- Closed Call side of November SPX Lazy Elephant for a $430 gain on Thursday

- Initiated December SPX 1870/1860 Credit Put spread position on Thursday ($1,300 credit)


Market Conditions 

(Click on image to enlarge)
Stochastics: 30 (neutral)
McClellan: -148 (neutral)
Stocks above their 20 DMA: 31% (neutral)

No man's land, but practically oversold territory already. A mere -0.5% would get us there. However, I am in no mood to add anymore Credit Put spreads to my collection of spoiled children. I'm in baby-sitting/liquidation mode now and until the elections.

We experienced an oversold condition on Thursday. If you panicked and were unable to sell way out of the money Credit Put spreads due to fear flowing through your veins, you deserve a life of celibacy.

And here's the Russell, in which I have an unbalanced Iron Condor:
(Click on image to enlarge)



Current Portfolio

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


NOV RUT 1110/1120/1340/1350 Unbalanced Iron Condor
$2,440 credit. 5 weeks to expiration. 14 deltas on the Put side vs only 1 on the Call side. You could argue it is time to take the Call side off, and I guess, yeah, you can do that. I will keep squeezing it as there is no other upside exposure in the portfolio and RUT 1,340 looks like a really tall order anyways. Things might get a little ugly on the Put side however, which I will talk about in a second.


NOV SPX 1970/1980 Credit Put spread (remainder of Lazy Elephant)
$700 credit. 5 weeks to expiration. 11 deltas for the short 1980 strike. Not too bad. I would like to take this position off as soon as a $350 or $400 gain can be collected.



Action Plan for the Week

No new positions for me until after the elections. Obviously, no addition of new Credit Put spreads either, unless it is in order to adjust any of the existing ones.

- Adjust Put side of RUT Iron Condor if RUT reaches 1,175 or so. A 3% decline. Obviously possible, but I think unlikely this week, especially considering how close to over-sold we are. I would take a loss and deploy a Credit Put spread around 1,020. I would have no problem holding that one through elections day.

- Adjust 1980/1970 Put side of SPX Elephant if SPX reaches 2,060 or so. A 3.5%+ decline from here. Unlikely, but we must be ready no matter what. If that happens, then I would take the loss and would deploy a new Credit Put spread in the 1,850 area. I would also have no problem holding that position through elections day.

- Other than that, I would like to take a $400 gain on the 1980/1970 SPX Credit Put spread just mentioned above in the case of a strong market rebound.

- If none of the above happens, just keep riding the existing positions and collecting time premium.



Forex
The LT Trend Sniper will get short EURUSD on Sunday afternoon at the open (5pm Eastern Time GMT-5). Let's see if it can catch a good trend this time around. The Sniper started off the year decently but has been in a slump for a while and it is negative for the year. More details about these years' results can be found at the bottom of this page.



Economic Calendar

Monday: Europe's CPI. US Industrial Production.
Tuesday: US CPI. China's GDP and Industrial Production
Wednesday: Building Permits, Housing Starts, Crude Oil Inventories
Thursday: European Central Bank Press Conference. Philly Fed Index. Existing Home Sales.
Friday: US Core Retail Sales, PPI, Business Inventories, Michigan Consumer Sentiment.


Options Trading results: Up +6.89% Year to date (S&P benchmark is up +4.36% for the year)
                                    Portfolio 47% invested, 53% cash at the moment.

Have a nice weekend folks!
LT

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Check out 2016 Track Record


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