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Friday, October 28, 2016

Weekend Portfolio Analysis (October 28, 2016)

A quick one today as I have to run a couple of time consuming errands. Your pal LT is a busy and responsible man.

The SPX started the week at 2,148.50 and closed it at 2,126.41 for a 1.03% loss. The index is now up only 4.03% for the year.

I so wanted to start spitting out jokes about the elections, but, let's just focus all our energies on our vices instead.

Recent Trading Activity

- Closed Put side of Nov Lazy Elephant for a $450 gain on Monday.
As a whole, the Elephant brought in a $880 gain. I'm now 3 for 3 with Elephants and they have provided $1,897 in terms of gains for the portfolio. Nice contribution.

- Closed entire Nov RUT Unbalanced Iron Condor for a small $388 gain on Thursday.
This was not planned in last week's analysis, but you can read about all the rationale here.


Market Conditions 
(Click on image to enlarge)
Stochastics: 27 (neutral)
McClellan: -132 (neutral)
Stocks above their 20 DMA: 31% (neutral)

No man's land but very close to a short-term pessimistic extreme. A 1% move lower not only would put the market in price extreme condition but it would also break that horizontal support I have drawn. The beautiful thing is that the existing position that you see there in yellow (December SPX 1870/1860 Credit Put spread) is still looking great regardless of recent bearishness or increase of fear (VIX).

Here's the Russell. Although I have no longer a position here, I am still showing that I removed the old uptrend channel. I added sideways support and resistance, and support was broken on Friday:
(Click on image to enlarge)

The Russell looked much weaker than the S&P this week pissing away 2.63% of its value.


Current Portfolio

DEC SPX 1860/1870 Credit Put spread
$1,300 credit. 7 weeks to expiration. Looking very safe at just 6 deltas. I'd like to close this one for a $1,000 gain before the elections, but being realistic, that seems unlikely now. I think fear will only increase in the next few days. I have however no issue with holding this one through elections day.



Action Plan for the Week

- Close the DEC 1870/1860 SPX Put spread for +$1,000 if possible at any point during the week. This is unlikely.

- If we get an extremely pessimistic reading, so that I can sell for example a NOV RUT Credit Put spread around 1,060 for 0.60 credit or better I think I'm going to go with it. RUT was trading above 1,260 as recently as less than a month ago. A 200 point loss in RUT represents a serious almost 16% correction in the index. It would be just good odds down there so I may run with it. If I don't feel particularly "ballsy" I am fine just going through the elections holding a single position (SPX)

Very simple and laid black action plan this week.



Forex
The LT Trend Sniper will close its short EURUSD position at the open on Sundayfor a tiny loss, after seeing gains of +2% dissappear.

Unfortunately, no multi-week trends have existed in the Euro this year, and my Trend follower will not perform well under such circumstances.

The Impatient Sniper however, would have made some nice gains in this position as it gets "impatient" and abandons positions quicker, so it wouldn't have suffered this last Friday's bar. But, old LT Trend Sniper is my homerun hitter, and my go to strategy when it comes to Forex, and I'm sticking with it. (Talking about homeruns: Go Cubs!!)


Economic Calendar

Monday: Europe's CPI. China's Manufacturing PMI.
Tuesday: US Manufacturing PMI
Wednesday: ADP NonFarm Employment change, Crude Oil Inventories, FOMC Statement
Thursday: US ISM Non-Manufacturing PMI
Friday: NonFarm Payrolls. Unemployment Rate.


Options Trading results: +7.38% for the year (S&P benchmark: +4.03%)
                                         Portfolio 17% invested, 83% in cash.

Take it easy, but take it anyways.
LT

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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