Daily Market Newsletter

This is just a difficult market to sell non-directional premium in with implied vol levels of 6%; we are just playing with too little premium to make the sale of an option worth it unless we target much higher IV underlyings.

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 have the following positions in play:

• SDS Stock – I still own 100 shares of this stock from 2011 and will continue to write calls against this position with every correction/pullback.
• 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 sold the NOV $18 calls for $.22
• F NOV17 $11 Puts (9/18) were entered for a $.19 credit. I will sell against the next pullback.
• CHK 20OCT $4 puts (9/20) were sold for a $.19 credit. I also set up the CHK 17NOV $4 puts (10/9) for a $.20 credit.
• NUGT 13OCT $31 put (10/4) was entered for a $.51 credit; I closed those out (10/9) for a $.10 debit. I want to use the next pullback to see if I can sell another position against the 13OCT cycle for $32 or better for at least a 1% return; I will enter a $.40 limit order to sell the 13OCT NUGT $32 puts.

If the price of SLV continues to drop, I will sell the 17NOV $15 SLV puts for a minimum of $.15 credit. We are getting close to this

Most major Crypto coins continued their coiling price action which makes sense as their Monthly charts try to recharge.

Please refer to the left sidebar section if you’d like to get caught up on “FAQ” -style intro videos.

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.”

Here is the most recent video which is “Bitcoin to $6000?”

Viewing the SPY from the current Friday closing price at 254.37, there is a +/- 2.11 EM into this Friday. This has been a very “normal” EM lately of about 20 SPX points per week. Last week’s

The EM targets for this Friday’s close is 256.48 to the upside, and 252.26 to the downside.

with markets at exhaustion, I would anticipate a consolidation week for the first few days prior to the Q3 earnings cycle which kicks off later this week with large banks.

Last week, I took the upper EM fade as the price hit that target early in the week, which was obliterated by Thursday’s move higher. That created a loss of $.35 debit. The expected move was 2.1 points last week, and the move ended up being 3.47 SPY points. Point taken that we should expect larger moves when the week starts with full energy on the daily chart.

I am relabeling this section the Ratio Butterfly strategy. I have no candidates today. My test trade LYB is still in play for another three weeks and has come down from its highs; if it is able to drop below $98 then I have a good chance at profits still.

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/ZsIjgu

I have the following positions:

• IBB 27OCT 345/347.5 Vertical Call Spread (10/2) was entered for a $.60 debit. My goal is 100% return on this trade; at the present time it’s showing a $.75 exit.
• AAPL 3NOV 155/157 Vertical Call Spread (10.9) was entered for a $1.23 debit; my goal is 50% return on this trade.

Probably a little late to pound on the Whale trade with daily index charts at exhaustion, unless we pick on Tech.

USB looks pretty good on a break above 54.40, however earnings are close.

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.

Quite honestly, 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 will place the next Hindenburg trade if/when we see FULL EXHAUSTION on the monthly/weekly/daily charts. This strategy gave us some nice moments of profitability in 2105 and early 2016, but since that point the backdrop of central bank printing and ZIRP has created an ineffective hedging strategy. My experience is that the day that we stop looking at this strategy will be the day that we experience the downside “reset.”

We currently have the following positions in play with this strategy:

• SPY OCT17 222 long puts (7/24) – I entered this position for an $.85 debit. This position was up 50% at one point and the temptation to remove it for a profit was strong, however the point of these trades is to hedge the downside for existing longs, AND try for those home runs on corrections that come out of nowhere.