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Saturday, March 18, 2017

Weekend Portfolio Analysis (March 18, 2017)

This week's analysis has been published at LTOptions.com

Download Weekend Portfolio Analysis (2017-03-18).pdf

If the above link doesn't work for you, simply log in to LTOptions.com, navigate to the "Weekly Analysis" tab and download the document from there.

The Weekend Portfolio Analysis will be available on this site next week for historical reference.

All currently open positions can be seen on the Track Record page


Related Article: Weekend Portfolio Analysis (March 11, 2017) 
Recent Trading Activity

- Initiated an April RUT/IWM Unbalanced Elephant position on Monday. Net credit $1,396.

- Closed 2455/2460 Call side of March SPX Unbalanced Iron Condor on Monday. Just as planned over the weekend, closing for a small $240 gain.

- March SPX 2100/2090 Credit Put spread expired for max profit on Friday. The SPY 214 long Put also expired, as a loss in this case. The combined result: +$1,200 - $126 = +$1,074. Details and thoughts in the provided link.


Market Conditions

(Click on image to enlarge)
Stochastics: 76 (neutral)
McClellan: +10 (neutral)
Stocks above their 20 DMA: 52% (neutral)

No man's land.

Long gone are the days when talking about the increase of interest rates was bearish for the markets, let alone actually increasing them. The markets went up on an interest rate hike. This is the exact reason why I prefer to not over analyze fundamentals in the short term, as they can be interpreted radically differently by the market at different points. The odds of the hike in this case were pretty high prior to the event, but even if you had been guaranteed in advance the hike was coming, it wouldn't have been a very actionable piece of information. Third hike, and a very different market reaction than what was seen during the first one.

Hikes aside, we're in no man's land now, so there's plenty of room either way and the preference is to play via neutral positions. If the environment persists, I'll be trading a May Unbalanced Iron Condor by Friday of this upcoming week.

And here's the Russell 2000, where there is now a March Unbalanced Elephant:
(Click on image to enlarge)



Current Portfolio


APR SPX 2175/2180 Credit Put spread
Used to be an Iron Condor until the 2455/2460 was taken off the table this past week. $960 credit. 5 weeks to expiration. Very comfortable at the 5-delta mark. No concerns.


APR RUT/IWM 1260/1270/1450/1460/129/146 Unbalanced Elephant
$1,396 net credit, 5 weeks to expiration
Defense lines set around $1,310 to the downside (adjust Credit Put spread) and $1,425 to the upside (close Call side for small loss and ride the Put side to expiration to obtain an overall net gain despite the Call loss).

Action Plan for the Week

- Adjust RUT Elephant's Put side if RUT falls to 1,310. This is a 6% decline in a week so, an unlikely event. Close the Call options is RUT reaches 1,425. This includes the 1450/1460 RUT Credit Call spreads and the IWM Long 146 Calls. Closing it all for a combined loss of $700 would allow us to make money through the Put side and its $1,200 credit, eventually resulting in a net $500 gain. If neither of the levels just mentioned is reached, do nothing.

- If an overbought environment is reached, I'll consider re-establishing the Call side on the March SPX position, making it an Unbalanced Iron Condor again. Ideally, I would like to sell 1470/1480 CCS for 0.90 or better.

- Enter May SPX Unbalanced Iron Condor on Friday. Looks like the Put side will be around the SPX 2,200 level whereas the Call side will be around SPX 2,485. These levels may change if the market makes a decent move during the week.



Economic Calendar

Wednesday: Existing Home Sales. Crude Oil Inventories.
Thursday: New Home Sales
Friday: Core Durable Goods orders, Services PMI, Manufacturing PMI

Take it easy folks,
LT


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Check out 2017 Track Record


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