9/14/2007 8:47:02 PM
It's been a long cycle this month but it looks like being one of our most profitable. The market closed at 1484 and with only one week to expiry, we're 96 points from our sold call and 174 points from our sold put.
Our system moved back into Buy mode during the week, the market is at one of those points where it's undecided on which way it wants to go and this causes some whipsaws between buy and sell modes. The market seems to be waiting for the Fed meeting on the 18th and after this there is likely to be some big moves either up, down or both. One thing's for sure volatility will be high and it's great to be have both sides of the market covered during these times.
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)/1590(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.
The chart above shows that the "V" shape that I spoke of last week is holding and while this pattern holds, the bias is with the bulls. In addition, the market has now closed above the 50 day MA at 1481.56 and this adds strength to the bullish argument. Resistance remains between 1480 and 1500 and a close above 1500 is the next big hurdle.
On a side note, watch your email on Thursday night, we may be entering a new position on Friday for an October spread.
Enjoy the weekend and Feel free to email me directly at email@example.com if you have any feedback or questions.