8/31/2007 8:48:13 PM
3 weeks to go.
Firstly, my apologies about last week, my father passed away and I took time out to be with the family.
Secondly, with 3 weeks until expiry, our positions remain sound as the market currently trades sideways between 1430 and 1480.
Our system is currently in Sell mode but it looks close to going back into buy mode.
On August 9th we sold an SPX Sep 1310(SXYUB)/1300(SXYUT) Put Option Spread for a net credit of $0.80. (i.e. $80 per $1,000 of margin)
On August 17th we sold an SPX Sep 1580(SXMIP)/1580(SXMIR) Call Option Spread for a net credit of $0.40. (i.e. $40 per $1,000 of margin)
Please note: while there two separate positions open, $1,000 margin covers both spreads due to the fact that the market cannot close at both strikes simultaneously on expiration.
Looking at the chart above, 1480 - 1500 is resistance and 1430 remains the support level. While fear is still quite high out there, particularly with September traditionally being a bearish month, we could actually be seeing a reverse head and shoulders pattern developing (shown by the funny lines that look like someone sleeping peacefully) and this is a bullish pattern. A close above 1480 would be the first confirmation and a close above 1500 would be a major confirmation.
Enjoy the long weekend and Feel free to email me directly at firstname.lastname@example.org if you have any feedback or questions.