Daily Market Newsletter

I have the following position:

• SPX 2745/2750*2810/2815 Iron Condor (6/14) entered for a $2.50 credit. I closed the position (6/22) for a $1.80 debit limit order. This gave me just about a 25% return on risk. We were in the trade for a little longer than I expected, 7 trading days. 

No setup at this point; we need to be very selective.

I have no remaining positions. Calendar spreads are good for markets with some volatility but they are long vega so we can’t enter them during IV spikes or periods of elevated volatility. The IV is starting to resolve lower so we might be back in business if the price resolves back into quiet/trending.

The calendar spread tracking sheet is available for your download here. Yes, if you follow the math in the sheet, all of the numbers account for commissions in and out of the trade. Please note: If you trade these positions please keep the size small, to the point where you “do not care” about the success or failure of this position.

I am targeting stocks using short puts/covered calls that offer a much lower absolute risk point, where in event of crash we can almost define our total risk by the price of the underlying. While this is not how I intend to manage risk in these positions, I view this as fundamentally more solid than trying to actively manage risk on assets that are going for $$$hundreds which have also gone parabolic. I have the following positions in play:

• VXX Stock – I own 12 shares of this stock and will hold until Armageddon occurs.
• SLV Stock – I have 1000 shares of the SLV that was assigned at the $15 level. I currently have 17AUG $16.50 SLV calls (6/8) for $24 credit. .
• NUGT stock – I was assigned on NUGT at the $31.5 price level.I currently own the 13JUL $30.5 calls for $.32 on 6/12. While we continue to collect premium against this stock, I am having serious thoughts of bailing out on the next rally higher due to the drag on this leveraged ETF.
• BAC – I sold the 17AUG $27 puts (6/18) for $.34 credit. I will look to close these for $.05.

No entries at this time.

The crypto market has come under a lot of pressure lately and I attribute this to the market still being under the influence of a bear. Until a major “higher low” is printed these rallies will persist and be faded. Another difficult day on Friday as BTC lost 10% alone.

Investors should currently be looking to find technical entries to warehouse BTC/ETH/LTC assets for eventual trades on Alt-coins. You should also be looking to devices like “trezor” or other cold-storage devices to keep your assets off of the network, or other secure wallet such as Navcoin. Relying on the security of your broker is no longer good enough; no one can log into your ETrade account and “steal” your stock assets, but the whole nature of Cryptocurrencies and their portability means that someone can grab your assets and transfer them elsewhere. I will continue to discuss the tradingview platform in daily videos as I think that it is currently the best way to chart the “big three.”

Viewing the SPY from the Friday closing price at 274.74, there is a +/- 3.702 EM into this Friday. 3.149 EM into this Friday.  This is larger than last week’s 3.149 EM.

The EM targets for this Friday’s close is 278.44 to the upside, and 271.04 to the downside.

The Daily SPX chart is now fully charged, so an EM fade trade is not a good probability. Last week we saw a very nice EM fade setup and it worked out nicely for us.

I would actually like to do the opposite now, and take a Long Iron Condor into the 06JUL series. The current EM is 5.23 points into the back week Friday, so that would put the targets at SPY 280 to the upside and SPY 269.5 to the downside. I might have to use the SPY 279/280 which is going for $.18, and remember I want to match the downside cost of the spread so that they are nearly identical. I will set these up as two discrete debit spreads, and look for the price to hit that back week EM target sometime in the next week to ten days..

I have no current positions. I will consider setting up another ratio fly as price approaches resistance:

Entry criteria are:

• Using calls
• 17 to 50 calendar days
• center strike .25 to .40 delta
• ratio is 1/3/2 quantity, from the bottom, calls are long/short/long

We will exit the spread at a 60-70% level of credit received. The max risk on the trade is defined on the graph if the price goes much higher. There are no early exits, only exiting the week of expiry to avoid assignment. Also avoid dividend periods. I am currently trialing some trades and will discuss them in the newsletter; after a few cycles, I will start adding these trades to circulation. TOS scan code: http://tos.mx/hvWmMl

I have the following positions:

• INTC 29JUN 55/57 debit call spread (5/29) was entered for a $.97 debit; I will look for a 50% return from this position. I have a $1.50 exit credit set GTC.
• ABT 6JUL 62/64 debit call spread (6/4) was entered for a $.93 debit. I will look for a 50% return from this position.
• XLV 6JUL 84.5/85.5 debit call spread (6/6) was entered for a $.49 debit. I will look for a 50% return from this position
• IBB 20JUL 112/114 debit call spread (6/20) was entered for a $1.00 debit. I will look for a 50% return from this position .

No other trades at this point  .

The “Hindenburg Strategy” is meant to capture “value” from successive corrections that lead up to the final “death spiral” with a Bear Market. The basic principle is to buy 3-month out long puts on the SPY, and to finance those puts by the sale of credit spreads. Frankly, selling the “financing” trades has been a huge challenge in this low-vol environment. I will only sell put spreads on decent pullbacks that allow me to secure put spreads 10% OTM

• I entered the 17AUG SPY 245 puts (5/14) for a $1.41 debit. I will hold these through the next test of the 200 dma.