LTOptions at a 33% discount during the Year End Holidays.
Tell me More

BookingAlpha Option Trading Advisory

Saturday, October 26, 2013

Weekend Portfolio Analysis (October 26, 2013)

SPX went from 1745.20 to 1759.82 this week for a small +0.84% gain. The market keeps slowly creeping higher at the upper end of the uptrend channel.

Market conditions
(Click on image to enlarge)
Stochastics: 89 (overbought)
McClellan: +136 (neutral)
74% of stocks are above their 20 Simple Day Moving Average (overbought)
77% of stocks are above their 50 Simple Day Moving Average (overbought)

This market is overbought with just little room to move up. My forecast is the same as last week: Limited upside room and slow movement if we keep going up this week. But chances for a pull back increase each day. There seems to be a small bearish divergence between prices going up and indicators starting to go down a little.

November positions
SPX 1565/1570/1800/1805 Iron Condor with SPX at almost 1760 this trade still looks good. 19 days to go. The 1800 short Call is comfortably above the uptrend channel. I'm not concerned here. 76% probability of success. I will probably start getting concerned if SPX reaches 1780 or so.

SPX 1520/1525 Bull Put Spread Sure winner. Nothing to do here.

RUT 1160/1165 Bear Call Spread 83% probability of success with 19 days to go. I feel the 1160 short call is comfortably positioned above the upper end of the uptrend channel. Although anything can happen, I feel the market is too overbought at this point to have an extra +3% move in the short term.

December positions
SPX 1600/1605/1835/1840 Iron Condor the first December position was entered yesterday. With only one day in, there's nothing to be concerned about here obviously.

Action plan for the week
As for new positions, I would be interested in selling a RUT Bull Put spread with December options. But for that I need a decent pullback first of 2% or 3%. That's the only new position I have in mind now. The rest of my activity will be to monitor the existing ones, specially the 1800/1805 Call side of the SPX Iron Condor in November, which I don't think is in danger, but could be the only thing getting in trouble in the near future. Other than that, I will take it easy and let time decay do its thing.

Economic Calendar
Pretty busy week ahead.

Tuesday: Retail Sales, PPI, Consumer Confidence
Wednesday: ADP Non Farm Employment Change, CPI, GDP
Thursday: Initial and Continuing jobless claims, Chicago PMI, Chinese PMI
Friday: ISM Manufacturing Index

Good luck this week folks!

Check out 2013 Track Record

Go to the bottom of this page in order to see the Legal Stuff

1 comment:

  1. Very nice Henrick. I am going to sell a bull put spread on SPX next week. I am going to experiment with not always selling the bear call spreads unless absolutely necessary to hedge the bull put spreads.