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Sunday, April 15, 2018

Weekend Portfolio Analysis (April 15, 2018)

This week's analysis has been published at

Download Weekend Portfolio Analysis (2018-04-15).pdf

If the above link doesn't work for you, simply log in to, 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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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 2018 Track Record page

Last Weekend Analysis now publicly available:
Weekend Portfolio Analysis (April 7, 2018) 
Recent Trading Activity

- Closed the April RUT/IWM 1365/1375/1670/1680/168 Elephant for a $1392 gain on Monday. Overall, this Elephant was a loser as the Put side had been adjusted from 1450/1440 down to 1375/1365. I'm just reflecting here the gain that was obtained this week. This move was made in order to free up some capital, as explained in the previous Weekend Analysis.

- Initiated a May RUT Elephant on Monday for a total net credit of $1,420.

- Closed the May SPX 2240/2250 Credit Put spread on Thursday for a $900 gain. This represented 75% of max profits with more than 5 weeks to expiration. I had a closing GTC order to close and it got triggered while I was away.  

Market Conditions
(Click on image to enlarge)
Stochastics: 80 (Overbought. Up from 69)
McClellan: +40 (Neutral. Up from +8)
Stocks above their 20 DMA: 53% (Neutral. Down from 31%)

No man's land

There's plenty of room both ways now. My guideline to the downside is 2540 as horizontal support, while I'm still looking at the upper end of the channel as resistance (diagonal red line). Obviously before touching that, the previous swing highs around 2,800 can offer horizontal resistance too.

The index is still below its 50 and 100 day averages. Many, use those as guidelines for potential resistance/support, but I'm not a fan of that approach and I tend to just look at price action and recent inflection points.

VIX still attractive at 17.41 and I intend to deploy the first June position later in the week. In all likelihood, an SPX Elephant.

The Russell Index:
(Click on image to enlarge)
Clearly stronger than SPX, now above all the main moving averages. I'm looking at potential horizontal resistance around 1,615 (triple top) and still using the lower up-trending diagonal as my guideline for support. I'll try to deploy positions above resistance zones and below support zones.

Current Portfolio:
The SPY Calls and SVXY Calls expire in December and January of next year. All bullish bets on a market rebound.

Let's now look at the income plays.

Apr. SPX/SPY 2440/2450/2890/2900 - 290 Elephant
Net Credit: $1,608 and one week to expiration.
(Click on image to enlarge)
Defense line: 2,480 (adjust the Put side). No problems here. Should expire for max profits without hassle.

May. RUT/IWM 1375/1385/1630/1640 - 141/164 Elephant
Net Credit: $1,420 and five weeks to expiration
(Click on image to enlarge)
Defense line: 1,435 (adjust the Put side). 1,580-1,585 on the way up (close Calls at a loss, keep riding the Puts). It would be a temporary loss, but a eventually an overall gain thanks to the Credit obtained from the Puts being larger than the hypothetical loss taken on the Calls.

Action Plan for the Week

- Let the April SPX Elephant expire for max on Friday.

- Carefully look at the May RUT Elephant for possible closure of its Call side.

- I'll deploy the first June position late in the week. If we reach an oversold extreme, it will be a Credit Put spread. If we rally hard, and I'm talking about moving 2 or 3% above the 50 day moving average, then I'll use a 4:1 Unbalanced Iron Condor. If neither of those two things happen, then I'll deploy an Elephant.

Economic Calendar

Monday: US Retail Sales. Three FOMC Members will speak. China's GDP and Industrial Production. 
Tuesday: US Building Permits and Industrial Production.
Wednesday: Three more FOMC Members will speak.
Thursday: Philly Fed Index.

Good luck this week my friends,

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Check out 2018 Track Record

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