Well, I am happy to see the market coming off the highs. And dare I say starting off down after yesterday being down. 2 in a row? That hasn’t happened for months. My iron condor and broken wing butterfly positions are loving this. (SPY and IWM)
The Bond Yield trend that should effect the stock market is finally happening 5%. It effects Credit Card rates, adjustable rates mortgages, and most importantly “safe” rates of return can be had, without risking it in the mkt. I like my trading style during these times. Nimble. a few days to a month, then put the money on the side in cash. Then look for another high reward setup.
I am well positioned if this market falls after the open. I will probably adjust some of my IWM postion.
QQQQ the broader market took a hit, but he Q’s stayed put. Perhaps it is because the Q’s have not been raging quite like the DIA or SPY. I am still long some Q’s. Update. The Q’s are negative 10:1 @10:41 MST. They look like they are basing at a 38.% fibonacci ($47.02). It is very poor technically out there. But this is where I said I was going to put another level on. It is at the bottom of the channel, and support at the fib. It doesn’t seem to be get better than this for a trend following system. Stop is below $46.8 (20 MA). (Sidenote – SPY has retaced 61.8% from the same move. relative strength goes to QQQQ).
JADE – with the Jewelry business strong, JADE stays positive. I will straddle this position between 12.25 and 12.5. I can only stand 500 deltas of risk before I take it off the table, and start a new trade by straddling the position. My target is still between 14-16.
SPF – I think I made a mistake yesterday. I rolled from my June 22.5p to July 20p. I bought the July 20p for .65 (stock @ 21.52), then rode the price down to an uptrend line and scalped the 22.5p for 1.45 (.30 scalp). When both of these were on I had created a synthetic straddle. I was making money if the stock when up or down. The problem? With so little time until expiration, theta decay really can eat into profit. So I got out of the 22.5p. But by taking away that protection, I opened myself up to greater potential losses in with just a 20p for protection. Perhaps with rising rates effecting housing stocks, I should have waited a few days. Time will tell. The stock has to rise above 22.25 for profit. I do have some other options with Collars. And if the price goes down farther I am able to use the sale of the 22.5 vs 20p option to buy more shares, without drawing from more seed capital (proper “dollar cost averaging”)
AMTD – pressure for merger talks from 2 hedge funds. Price elevated overnight. Up 2 pts at one time. Now off by .70 from high. I will look for ways to exit the position with a nice profit.
EK – still have 16 spread on. Currently in negative theta position here (not desirable). Underlying below 26.25 puts me back in Delta positive territory. With 8 trading days to go, the potential profit is @ half of it’s maximum.
COGN – remains right in the sweet spot. It has a very nice and large profit sweet spot at these elevated Volatility Levels.
I am earning my money today. I put plans into action. The market dropped rapidly. It has caught itself this afternoon. As mentioned above I entered another unit in the Q’s.
I entered an STLD calendar @ .45 with 2 units. 3:1 R/R ratio. Very good. 3% vol skew., and overall volatility is relatively low. It is a 44 day trade. July/Aug 45p. (underlying 46.60)
I also entered XLE – This is a very interesting Skewed Iron Condor. With the underlying @ 68.77, I entered this trade s66p/b64p and s69c/b70c for .92credit. My max gain is .92, my max loss to the upside is .08. My max loss to the downside is 1.08. And the breakevens are 69.92 and 64.92. The reward to risk is right for a 44 day trade.
SPF is messing me up right now. It is still well within risk parameters.
EK is falling nicely. I am looking to get out of my remaining positions for the right price. The profit has been extremely good. I am now looking to invest my financial and mental capital elsewhere.
The SPX chart is forming an interesting pattern. Broke a long term uptrend today. A head and shoulders pattern may be forming, interesting. The month of June could get interesting. I may start to pair down a few of my positions so that I can have some bullets when the time comes. I’m scratching my head alittle with QQQQ. I would like to see a rise here, and I am keeping a tight stop. I put some charts on the page later tonight.
The Bond Yield trend that should effect the stock market is finally happening 5%. It effects Credit Card rates, adjustable rates mortgages, and most importantly “safe” rates of return can be had, without risking it in the mkt.