2/1/2019 Weekly Recap and Look to Next Week

The market moved up fairly sharply because of no reference to future interest rate increases and a good corporate earnings week.

Last week we were able to close a couple of our Short Butterfly’s for target profit and entered into a couple of more. We have been trying to keep about 5 own at a time if we can find good opportunities.

We also closed a Strangle for target profit last week.

Our open Short Butterflys are in good shape.

Our open Strangles are still in good shape.

Our SPX Iron Condor saw our short Calls get up to Delta 22, this is a concern but time decay is own our side. If we can get a pullback in SPX next week we might even be able to close this trade for target profit.

We entered a NDX Call Credit spread after our SPX Iron Condor began to move against us, unfortunately this was just before the main run up. The NDX short Call delta is still fine but if the market continues up we may have to roll this out and into an Iron Condor position in NDX.

We have two open Diagonals still. The ones we have been fighting for months. V is moving toward a breakeven point but EEM is still a mess. We should be able to salvage V but will probably end up taking some sort of a loss on EEM. It is just not worth fighting for the return we would get. Better to close and use the funds on a better trade. We will keep you updated.

Our probability based Iron Condors are a mixed bag right now. IYR is the only one showing a significant loss. BUT, all the Theta’s are still positive (including IYR) so we are not too worried yet.

Our portfolio Delta indicates we are significantly short as compared to SPY so we would really benefit from a market pull back. A consolidation would help but it would need to be extended to time decay can take effect.

So, what do we think about next week?

We are going to look at SPY instead of SPX because we are working on a new strategy.

In the past few weeks SPY has opened down on Monday’s. Based on Friday’s candle there is a good possibility of that this Monday. SPY is up against some weekly resistance on the up side. If it manages to push through that who knows but our gut says it will pull back some or consolidate.

One of our swing indicators is also signaling a pull back or consolidation. Our overall Swing trade indicator says to look for pull backs and enter long. This actually switched from short to long last week.

We are also seeing significant MACD divergence on the SPY Daily chart further suggesting a pull back or consolidation.

Excluding any world events or other financial news that could change our opinion we are going to start the week looking for a pull back.