July 21, 2017

November Expiration Cycle Begins

The November options expiration cycle stared with a bang today. The sharp decilne last week carried over into this week as the market opened the day substantially lower. Buyers stepped in immediately and the gap to the downside was filled within a few hours of the opening bell. Two of the major indices we follow (SPY and DIA) are still in an oversold state so I would expect to see some follow through to the short-term bounce tomorrow.

We also established our November position in the Iron Condor strategy with an enormous 260 point range. Last month we brought in the same amount of credit with only a 200 point range. Thanks to Mr. Volatility’s recent jump we were able to extend the range to 260 points over the next four weeks for the same credit. The VIX moved lower as the day progressed so we were fortunate to lock in such a large range for the November cycle. The underlying SPX would have to move over 8.5% over the next four weeks before our trade was in jeopardy of taking a loss.

Overbought/Oversold for October 22, 2007

S&P (SPY) – 27.3 (oversold)

Russell 2000 (IWM) – 40.2 (neutral)

Dow (DIA) – 20.7 (oversold)

Nasdaq 100 (QQQQ) – 51.2 (neutral)

We work hard to bring you our latest views, opinions and research on a daily basis. If you are a loyal reader and find our thoughts useful please show us your support by joining our newsletter service. We currently follow 3 stock options strategies in our investment newsletter, the ETF Extremes, SPX Short Iron Condor and SPY Diagonal LEAP.

If you want to an in-depth, step-by-step look at how we trade our strategies purchase our acclaimed E-Book! With your purchase you will receive Two Free Months of our investment newsletter plus unlimited access to our Insider’s page enabling you to follow our strategies as you learn. What do you have to lose? Join today!

Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com