SPX, DJI, RUT all at all-time highs.
The market hasn’t been favorable for neutral traders like us. That explains the minimal positions that we have at the moment. We see no point in initiating a position that will result in troublesome adjustments and high chance of losses. So we wait and trade with care.
We currently have only one open position: the RUT iron condor initiated on 15 May. We closed up our SPY double diagonal initiated on 26 Apr on 31 May when the SPY is testing its all-time high.
As you must have heard, the broad market is bullish. The S&P 500 and Dow are both at their all-time highs. Even the until-recently-still-weak Russell 2000 (RUT) is also at its all-time high (highest in at least 2 decade!) Under this kind of market conditions, there is really not much chance for neutral trades to flourish.
There is practically no resistance to speak of since all three indices that we track are at their all-time highs. Of course we may initiate some bullish setups to take advantage of this strong market even though we are neutral traders. Remember, the trend is your friend. However, before you turn bullish, you may want to notice the long red candles every once in a while. Especially on the SPX and RUT, a quick glance seems to suggest more long red candles than long white candles. Be careful with the bullish setups. You don’t want to be caught in the whipsaw.
Looking forward, we have about 11 days to June expiration and 46 days to July. With this kind of market conditions, we can’t really go too far out with our setups isn’t it?
