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Sunday, May 27, 2018

Weekend Portfolio Analysis (May 27, 2018)

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

Download Weekend Portfolio Analysis (2018-05-27).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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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 2018 Track Record page


Previous Analysis now publicly available:
Weekend Portfolio Analysis (May 20, 2018) 
Recent Trading Activity
- No Activity. I tried to initiate a July SPX Elephant on Friday but didn't not get filled on the few variations I tried. Work got in the way this time as I was very busy and with little time to look at the markets this time. I'll try to initiate the position early this week (Tuesday as markets will be closed on Monday for Memorial Day).

Market Conditions
(Click on image to enlarge)
Stochastics: 60 (Neutral. Down from 69 last week)
McClellan: +3 (Neutral. Down from +51)
Stocks above their 20 DMA: 64% (Neutral. Down from 67%)

No man's land

Plenty of room to go both ways. Time for a neutral position rather than individual credit spreads on one side of the markets.

SPX price is a little higher than this time last week, yet all three oscillators are a little lower. This is a very small bearish divergence to be aware of. Although in recent years bearish divergence have not been as efficient as bullish ones. But we'll see.

My guideline on the SPX is still the 2540 - 2800 horizontal channel. I think we will stay in there for a while.


The Russell Index:
(Click on image to enlarge)
Much stronger all year and now in new all-time highs territory. There is room to run given that we are in no man's land territory, so caution should be exercised by those willing to play Credit Call spreads here.


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.


Jun. RUT/IWM 1400/1410 - 144 Elephant Put side

Net Credit: $1,004. Three weeks to expiration.
(Click on image to enlarge)
Defense line: 1,450 to the downside (adjust Put side). With the RUT above 1600, this is a very safe position. Almost all the profit has been made, so it can be taken off by those less aggressive.


Jun. SPX/SPY 2450/2460 - 251 Elephant Put side
Net Credit: $1,057. Three weeks to expiration.
(Click on image to enlarge)
Defense lines: 2,515 to the downside (adjust Put side. With the S&Ps above 2,700 this one also looks very safe.


Action Plan for the Week

- Still planning to deploy the first July position early in the week (SPX Elephant). This is the current idea I'm considering:  2465/2475/2825/2835 (SPX) , number of contracts 20/20/7/7 along with long SPY 254 Puts (1) and long SPY 285 Calls (8):
There may be slight changes as usual.


Economic Calendar

Monday: US Markets closed for Memorial Day.
Tuesday: CB Consumer Confidence.
Wednesday: ADP Non-Farm Employment Change. US GDP. China Manufacturing PMI.
Thursday: Europe CPI and Unemployment rate. US Pending Home Sales.
Friday: US Non-Farm Payrolls. Unemployment Rate. ISM Manufacturing PMI.

Good luck this week folks,
LT


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Check out 2018 Track Record


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