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Sunday, June 3, 2018

Weekend Portfolio Analysis (June 3, 2018)

This week's analysis has been published at

Download Weekend Portfolio Analysis (2018-06-03).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The Weekend Portfolio Analysis will be available on this site next week for historical reference.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

Previous Analysis now publicly available:
Weekend Portfolio Analysis (May 27, 2018) 
Recent Trading Activity
- Initiated a July SPX Elephant for $1,458 credit on Wednesday.

Market Conditions
(Click on image to enlarge)
Stochastics: 68 (Neutral. Up from 60 last week)
McClellan: +58 (Neutral. Upfrom +3 last week)
Stocks above their 20 DMA: 63% (Neutral. Down from 64% last week)

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.

The index is still trapped inside the 2540 - 2800 range, where I think it will remain for a while. oscillators currently pointing upwards. I favor a little upside action this week. But, as always, market forecasts specially so short term are meaningless. The focus is the 2540-2800 range and playing outside of it if possible.

The Russell Index:
(Click on image to enlarge)
Price action in the Russell has been consolidating in all-time high territory. However, it is starting to get a little far from the 50-day average. Roughly 5% higher at the moment. Although anything can happen, a runaway rally seems unlikely to me at this point, at least until the averages catch up a little.

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. Two weeks to expiration.
(Click on image to enlarge)
Defense line: 1,455 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. Two 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.

Jul. SPX/SPY 2490/2500/2840/2850 - 255/285 Elephant
Net Credit: $1,458. Seven weeks to expiration.
(Click on image to enlarge)
Defense lines: 2,570 to the downside (adjust Put side). 2,800 to the upside (close Calls at a loss, keep riding Put side, which has a credit that is greater than the Call side loss.

Action Plan for the Week

- By the end of this week, I intend to enter the second July position. It will be a RUT position.
The Russell is getting a little over extended (5% higher than its 50-day avg). We've seen it more extended than that in the past, but it is starting to look as if the upside will be a little limited. So, I can be just a little more aggressive on the upside. Perhaps playing just an unbalanced Iron Condor, which typically collects more credit than an Elephant but has greater upside risk. Or even an Elephant with a greater number of Calls than usual. In any case, things may move a lot from now until Friday.

- Due to capital limitations, I will have to close one of the June positions. They are both sure winners by now, and could be left to expire worthless, but they take up margin that would make the previous trade idea impossible. So, I'll close one of them. Whichever has more profits accumulated.

Economic Calendar

Tuesday: ECB President Draghi speaks. 
Wednesday: US ISM Non-Manufacturing PMI.

Good luck this week my friends,

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Check out 2018 Track Record

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