I reflected on the week, and I was very pleased. I exited a number of positions last week that I would have like to have on this weekend, but all and all it was very good. The first time in awhile in which every day was a low to mid 4-figure profit day. The Portfolio in total was up 15% or so on the week. Tuesday being the biggest profit day (7%), and a day I exited many positions. I had 60 orders filled. It was also the biggest option volume day in history. On wednesday the bank stocks made an 11 st. Deviation move. This should happen in 1 day in about a Trillion years. I am glad I was alive to see it.
Here is a video to listen to ask you review the post. Killer cup/counter percussion at the end of the video.
With all of that said, I am getting ready for another good week. I did not get to enter any other microcalendars. I like having new blood with a new positions on continually, however I am in mostly good positions going into the early week.
AMKR – relatively small 23 option postion
CAG – small 60 calendar position
FNM – Larger 450 multiple strike position
NTGR – small remaining 12 option position
TE – 100 contract position
USB – Larger 320 multiple strike position
VCLK – 160 ITM calendar position. This one turned bad on me prior to the Google announcement. It may be a future tell for google earnings
I sit on 84% cash.
The relatively strong NDX, is forming a base between the 61.8% and 50% retracements. The weakness of MSFT and GOOG this week may test this index. But so far so good. I exited all of my nasdaq positions this week. I may be looking at some strategies. Perhaps the MNX 185 calendars or butterflies. The declining 50 day MA makes me question any sustainable strength.
NDX – Implied Volatility is relatively high. This favors credit spreads and butterflies.
IWM – 2 months ago I wouldn’t have guessed this would have had relative strength, but when it fell, it fell hard all the way to the March lows. Somewhat surprising from the highs of a month ago. I don’t think we are over on this. I will start shorting this between 71 and 71.6. I think we are going to fall hard in this index. We are definitely not done with the down move here.
IWM IV – Volatility has backed off, but it is still relatively high. I don’t necessarily like this for a calendar spread yet.
SPY – With the S&P 500, here is what strikes me on this chart. The market does not move top to bottom in one straight line. It works it’s way up or down in legs. That is the most efficient way to reach extremes. We are simply oversold. We have had MASSIVE selling. And usually we have this type of selling, we have a pretty significant rebound (rubber band effect). My guess would be a 50% (132) to 61.8% (135) retracement of the June move. The IV chart is very similar to the IWM with relatively high Volatility. Last week we were at the edge of the volcano, and we didn’t fall in. Earnings this week will be interesting. Regional banks have to come out of the weekend without failures. If we move back below SPY 125, then I am playing down.
However, if we get a move above last week’s high SPY 126, then I play a rally. I would like to buy an Aug butterfly which straddles the 132 level, then as we approach those levels I will start looking at calendars on the way down. The 50 day MA also is centered between these two levels. This would seem to make lots of sense to me. I believe there is money to be made here.
Above, SPY 126I will be biased long this week. Tons of opportunity. There are many many earnings reports this week. Any neutral to good earnings will turbo charge the the markets. I will buy the market on pullbacks, and sell volatility. I will also be looking for opportunity in the Microm calendar arena.
Now go play with some cups and have a great weekend.
And here is something that the brokers at TOS can learn