Daily Market Newsletter

I have no positions at the current time.

No setup at this point; we need to be very selective. I would not sell LP Condors if we go back into corrective mode.

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. If the price resolves back to quiet/trending then we can place these again.

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 will bail out on the next rally higher due to the drag on this leveraged ETF. I will stay in this position as long as we’re printing green H-A candles on the daily chart but will start to thin out this position starting tomorrow as I will sell 20% of it into strength. Please note that I will have to buy back one of the short calls to do so. I will buy back one call option and sell 100 shares.
• BAC – I sold the 17AUG $27 puts (6/18) for $.34 credit. I will look to close these for $.05. If the price continues lower without me being able to secure an early exit, I will accept assignment.

No entries at this time.

The crypto market has seen a little pop to the upside since this weekend; I believe that this is only to relieve oversold pressure and bears will reload once again soon. There has been no capitulation yet. .

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 271.28, there is a +/- 4.236 EM into this Friday.  This is larger than last week’s 3.702 EM and the trend lately has been towards an increasing EM.

The EM targets for this Friday’s close is 275.52 to the upside, and 267.04 to the downside.

I like the idea of an upper or lower EM fade this week; debit spreads on Monday or Tuesday, and long options on Thursday or Friday.

I have the following positions in play per last weekend’s advisory:

• 06JUL SPY 268/269*277.5/278.5 Long Iron Condor – filled (6/25) for $.18 on the puts and $.18 on the calls. Will look for 200% return on the put spreads to exit those. This position looks like it will expire worthless tomorrow; I was not quick enough to close the put spreads for a profit. Tops are a process, bottoms are an “event.”

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:

• 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. Market action is not supporting long trades at this time; I will see if it’s possible to harvest any value out of the ABT and XLV trades by tomorrow.

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.