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Saturday, December 23, 2017

Weekend Portfolio Analysis (December 23, 2017)

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

Download Weekend Portfolio Analysis (2017-12-23).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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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 2017 Track Record page and the 2018 Track Record page


Last Weekend Analysis now publicly available: Weekend Portfolio Analysis (December 16, 2017) 
The 2018 Options Trading Plan is now available at LTOptions. If the link doesn't work, simply log in to LTOptions.com and you'll see it right after logging in.


Recent Trading Activity

- Initiated a February SPX Unbalanced Iron Condor on Thursday. Net credit received $1900.

Market Conditions
(Click on image to enlarge)
Stochastics: 71 (Neutral. Down from 77 last week)
McClellan: +16 (Neutral. Up from +14 last week)
Stocks above their 20 DMA: 58% (Neutral. Up from 55% as last week)

No man's land.

Even though it is No man's land, SPX price is 3% higher than its 50-day average and also close to the upper end of the long-term uptrend. Additional gains should be hard-fought in my view. Slow from here, no +2% daily increases.

A February 2:1 ratio Iron Condor was deployed this week. It's been a good while since the last one, as I basically spent the second half of 2016 playing 4:1 ratios (much more conservative Call side). The excessive Put side exposure that existed days ago has been removed and as the year turns the corner I'm finding myself a little more willing to challenge the Call side. Still a 2 to 1 is not a super aggressive ratio, but I'll be more willing to fight the Call side in 2018 based on the notion that the market just had a 20%+ year. Chances of that feat back to back are rather small.

With the end of the year in front of us, family reunions, lower trading activity, news vacuum, we should have an easy sailing over the next few days with time decay nicely working in our favor.

The Russell:
(Click on image to enlarge)
Alright I decided to draw a diagonal resistance line based on recent price action. We now have a nice channel to use as our guideline. Two positions here, and not too concerning for now.


Current Portfolio

Dec29 RUT 1410/1420/1590/1600 Iron Condor
A small $785 credit and expiring this upcoming Friday the 29th. Call side at 4 deltas vs Put side at 1. Should be an easy winner this week.
(Click on image to enlarge)
Defense line: 1,425 (adjust Put side) and 1585 (adjust Call side).
With this position being a winner, which odds indicate, we'd end up the year up 20.3%
Nothing to be super proud about, but, remember, we are still fighting a vicious bull which is about to become the longest in history.
I feel that periods of out-performance for the strategy may be right around the corner.


Jan. SPX 2440/2450/2745/2750 Unbalanced Iron Condor
with additional 2480/2475 Credit Put spreads
Net credit: $2,050. Four weeks to expiration.
(Click on image to enlarge)
Defense lines: 2,510 (adjust 2450/2440 Put spread). Then comes 2,485 (adjust the small 2480/2475 Put spread). On the upside I'll wait until 2,740 to adjust the Call side.


Jan. RUT/IWM 1380/1390/1605/1610/161 Unbalanced Elephant
Net credit: $1,448. Four weeks to expiration.
(Click on image to enlarge)
Defense lines: 1,425 (adjust Put side) and 1,570 (close the Call side at a small loss, keep riding the Put side, whose gains will more than cover the hypothetical Calls' losses).

Feb. SPX 2520/2525/2780/2785 Unbalanced Iron Condor
Net credit: $1,900. Eight weeks to expiration.
(Click on image to enlarge)
Defense lines: 2,600 (adjust 2525/2520 Put spread) and 2,740 (adjust the 2780/2785 Call side).
There is risk concentration on SPX 2,740. A price where I would be defending two positions. This is generally undesired. I'm going to roll the dice this week and not address this. A 2,740 SPX price for the next week, with only 4 trading sessions seems very unlikely.


Action Plan for the Week

- The plan is very simple this week: Just baby-sit positions. I'll adjust at the levels mentioned above for each position but I think chances are high that nothing will be necessary.

- Let the Dec29 RUT Iron Condor expire on Friday.

- No new position for now, unless we suddenly get an oversold condition. In which case, you know the drill: Feb RUT Credit Put spread.


Forex
The Sniper's short Gold position was closed at a small loss.
With this result the performance for the robot was -0.16% for the year.
Mediocre result.
The Barclay's Currency Traders Index benchmark is at +0.31%. Also terrible. The Forex arena was definitely a tough one in 2017.

Sniper's results tracked here.


Economic Calendar
Monday: Markets closed for Christmas.
Tuesday: US Consumer Confidence.

Thanks for having been part of the journey in 2017.
Here's to a much better 2018!
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 2017 Track Record

Check out 2018 Track Record


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