4/19/2008 5:55:26 PM
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Summary of Position For April
We entered a April 1190/1180 Put Option Spread on March 13 and received a premium of $140 per spread. This equates to a net return of $137.68 per $1,000 of margin used or 13.77% after commissions for 5 weeks in the position (using Interactive Brokers commission rates). The return before commissions was 14%.
We attempted to capitalize on the strength in the market early on by doing a Call spread but we weren't able to get a fill at our desired strikes (there were subscribers that did however get this fill and would have achieved an even higher return for the month). In any event, we ended up with our second best monthly performance, and that's something to be grateful for.
On April 18th we sold an SPX May 1460(SXZEN)/1470(SXZEL) Call Option Spread for a net credit of $0.80. (We requested $0.65, and Interactive Brokers gave a higher premium due to the market gapping higher on open, please not the auto trades with Think or Swim did even better this time with a premium of $1.00)
The premium received is $80 per $1,000 of margin required per spread.
The strength in the market today helped us to get a better premium and it also moved us into Buy mode, I'll assess over the weekend if we are going to enter a Put spread on Monday.
SPX Chart - Bigger Picture
Longer term, we're getting to an interesting juncture, we have horizontal resistance around 1400 as well as the symmetrical down trend line around 1420. The indicators remain positive and 1430 is a possibility, however the fundamentals haven't changed and a move above the 1430 region would signify the resumption of the up trend and that seems unlikely at this point.
SPX Chart - Shorter Picture
What a difference a week makes, this time last week it seemed we were going to break down and head for 1275 again, but support held at 1325 and we added around 60 points. We visited both the lower and upper areas of the trading range that's been in force for several months now in the space of a week!
The question is, where to from here? It seems likely that we'll rise a little further on Monday but the overhead resistance is very strong and so I wouldn't be surprised to see a pull back again to the 1350 region. A mini up trend channel seems to be forming and this may be the path we'll follow in the short term.
For next week, support is 1340 and resistance is 1400.
The quote this week is from Ralph Waldo Emerson, "Adopt the pace of nature: her secret is patience."
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