Chop chop after the Fed…
Dear valued subscribers,
The SPX simply refuses to back down. It has been going up for weeks now. See the daily chart below.
However, it must be noted that the gains in the last few days were done with lower volume; a sign that it is running out of buyers. But at the same time, there’s still no sellers.
The Feds did cause some volatility as usual but the SPX gains 4.83 eventually. The SPX has been hugging the upper trend line for quite long now and chances are higher than ever that a pullback down to immediate support of 1368. Any close below 1368 and the bears have a chance. As long as SPX trades above 1368, the bulls are still very much in control.
There is really not much we can do at this juncture. If you are long, you should consider taking your profit or at least tighten up your stop. It is very risky to chase after the price and try to go long now. It will be the best to wait out for the market to stablize before putting on new positions. As such, there hasn’t been any suitable trades for our advisory lately. We are eyeing a few trades even as we speak. But we’ll have to wait for a more favourable situation before risking our capital. Nothing new to add really, except to say the same as last week: that a pullback is imminent but it hasn’t happened. Please visit our blog for more current updates and news.
Our weekly positions update
The recent bull rally in the broad market hurts many of our neutral positions. However, bear in mind that such a strong showing in the market doesn’t happen very often. We are being very careful about entering new positions for these few weeks because market conditions are simply not offering us any nice trade. There was no new position for the last week.
The SPY 131/132/138/139 Nov iron condor we put up on 12 Oct just got ITM today. We are looking for a suitable time to close this position for a small profit.
Our short DIA 111/113/118/120 Nov iron condor, which was rolled from a Double Diagonal initiated on 25 Sep is currently pretty deep ITM. We have 22 days for DIA to fall in order to profit from this trade. The Dow has been super impressive lately and the move we see in the Dow recently is something that doesn’t happen often.
We are constantly searching for viable trades for this advisory.
To your trading success,
Gary
Founder, Head Trader of MarketNeutralOptions
