What’s that??? It’s the sound of the market bouncing up and down like crazy! This has been an interesting week so far and quite frankly, I have no idea were things are going to end up. All of the current positions look good, so we’ll just keep looking for upward momentum to protect the low-side risk.

Currently my cash portfolio does not have any of Call spreads out; and I don’t think that this market is going to provide much of an opportunity for them this month. The only way that I can see selling Call spreads is if I am forced to roll a Put spread down and need to capture a bit of additional premium to cover the cost of the roll. We were able to get a few condors filled in the papermoney account, so that should provide a nice bit of extra profit this month.

As far as the rest of this week, I’m not sure exactly what is going to happen. After hours indicators show that the market is poised to open mixed with the S&P up while the Nasdaq and Down are down; and Friday will likely be a slow day. If we can get a sizable rally in the next two days I’ll consider putting on tops to my potential condors, otherwise, it’s all about managing downside risk.

The Morgan Stanley Hi Tech index seems to have found support right around the 497-500 area, so that is comforting. However the Fed minutes released today do worry me a bit; I’m still keeping a close eye on the support levels, my fear is that if they are breached, we could see a big drop that would challenge our positions.

Most of the commentary that I have read is mixed. Some folks think we have found a bottom, and others think its just the beginning of a bigger downward cycle. I think that nobody has any idea what is going to happen. If we get bad data, we tank… if the data is good, we rally – hopefully. It’s a bit of a tricky market right now, so make sure that you manage your risk correctly! Good luck and trade smart!

Categories: Options Trading