August Ends – My Options Portfolio Continues to Push Higher – Patience Pays

August was another good month for My Options Portfolio. The portfolio gained 15.6% for the month and is now up 74.2%, or $20,392.50 since its inception back in early May 2010. You can see all the trades directly from my ThinkorSwim account on the  Options Portfolio page of the website.

If you look at the trades you will notice that I had a total of 9 trades in the month of August, three of which were closing trades from late July. Of the 9, only one, was an outright loser and one was break-even, but with commissions the latter trade was indeed was a loser. The loss was -64.3%, but as you can see my position-size was calculated (roughly 6%), so the loss was minimal to My Options Portfolio as I went on to gain over 15% for the month.

In my opinion, position-sizing is the most important aspect of trading. Remember, this is a marathon and not a sprint and by limiting your exposure to any given trade, you allow yourself to absorb a losing trade without devastating your portfolio. I cannot emphasize this enough and is why I always encourage a well-thought out position-size plan before you initiate your journey into trading. Of course, everyone will have different position-size plan because everyone has a different risk-tolerance. You need to figure out just how risk-averse you are as a trader/investor and, in my opinion, once you have figured that out, you should proceed to take another step that errs on the conservative side. Believe me, it pays in the long run to start out conservative and then increase your risk rather than the reverse.

As part of my newsletter I send out real-time trade alerts that include my position-size. Of course, this is not advice, it is just to show my subscribers how I use position-size in my own account. As I stated earlier, it is up to you, the individual investor to do your due diligence and figure out what is best for your given situation. You earned this money, treat it with respect.

Anyway, I once again wanted to thank all of you who have signed up for my newsletter service. I truly appreciate the loyalty and support. Hopefully, I can provide some insight through my newsletter that will help you prosper over the long-term using options. I still have a few spots remaining and will continue to take requests that will be added to a waiting list. I have decided to limit my service to 100 subscribers. Smaller is better.

Market Commentary

As for the current state of the market, well, you have to be encouraged by the gap today and the sharp push higher if you are a bear. Yes, I said it, a bear. The push moved the market closer to a short-term overbought state. Moreover, we officially closed the gap from 8/24. However, I think the 8/11 gap still might be a push to close ($11.37), at least during this latest mini-rally. I would love to see a gap tomorrow morning, because I will certainly take a position if indeed that occurs. I am not sure I would hold it into Friday as the much-anticipated August unemployment report will certainly move the market sharply and I typically do not like to get caught up in the game of guessing the report. It is typically a futile attempt, but if the technicals are already in an extreme when the market enters such a report I will sometimes take a smaller position. We shall see soon enough. The next few days should be quite interesting.

Kindest,

Andy

Out of SPY Trade – Newsletter Service Officially Begins Monday

The rally Friday, particularly late, allowed me to get out of my SPY trade from earlier in the week. I was able to get out of both trades (two separate trades of 10 Oct 105 SPY calls) for a gain of 1.2% and 14.1%, for a total of $610. The profitable trade brings My Options Portfolio to 74.2%, or $20,392.50 since it was established in early May 2010. Check out all of my trades here. You can also view all of my trades (directly from my ThinkorSwim account, updated at the end of each month) on the Options Portfolio page of the website.

Subscribers

To all of my wonderful and loyal subscribers I want to thank you for all of your support over the past week. The response has been overwhelming. I will be sending out all my service details in the first Weekly Newsletter Report which will come to via email Sunday. Until then, if you are a subscriber, do not forget to sign up for my subscriber-only access twitter page. Sign up for a twitter account then go here http://twitter.com/acrowder. I will allow you access. This will be a key area for my subscribers so don’t miss out. However, the key elements of my service (newsletter, real-time trade alerts) will still be sent out through email (twitter as well). I want to make my service as tech and user friendly as possible. Access to my information is key and I want it performed in a timely manner.

Again thanks to all of you – subscribers, loyal readers, etc.. I appreciate all of the wonderful feedback. Keep it coming! I hope through your participation that I can make this an incredibly unique and most important, prosperous for all of us. My performance speaks for itself.

Kindest,

Andy

Newsletter Service Begins!!! Real-Time Trade Alerts.

Since its inception back in early May, My Options Portfolio is up 72.0% or $19,782.50 (including commissions). The win ratio since the strategy’s inception is an astounding 80.5% (33 out of 41 winning trades).

You can see all of the trades here and all of the trades verified at my Thinkorswim account (scroll down the page at the aforementioned link to see all of my trades).

Over the past few months, I have had numerous requests to initiate a newsletter service that follows my trades in real-time and discusses the options strategies, technical indicators, and sentiment indicators that I incorporate in my trading. The response has been overwhelming and certainly a wonderful surprise. The kind words and encouragement regarding my options trading and the strategies I use have certainly been a positive reinforcement after 10+ years of trading options.

I hope that now I can prosper and share my trading ideas alongside of all of you who have encouraged me over the past few months. Again, the response has been overwhelming and as a result I have decided to limit my newsletter to 50-100 subscribers. I hope this will not disappoint those of you who are unable to get in. If you are unable to get in please email me and I will add you to a waiting list.

Service details below.

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Newsletter Service Details

• 3-10 Options Trades Per Month – my proprietary trading system allows me to generate consistent winning trades, and as a member you will have full access to those trades the minute I post them.
• Real-time Trade alerts – get every trade update the instant I post it, sent right to your email inbox and twitter account. Trades are also updated live on my website.
• Crowder Options Strategy Guide – a concise introductory guide that gives you some insight into how I trade.
• Market commentary – I update my market outlook daily (and sometimes more) here on my blog, and only members get access to my inside perspective on twitter.
• Weekly Newsletter – includes weekly RSI overbought/oversold levels on 15-20 of the most liquid ETFs
• Access – I am available any time to answer your questions about my trades, my options strategies, and my thinking about the markets. Whether you’re new to options trading or are an inquisitive seasoned pro, I am glad to hear from you and will help in any way I can.

If you wish to subscribe, click on the Subscribe Here link below. Also, if you have any questions or comments please do not hesitate to email me at andy.crowder@gmail.com.

Subscribe Here!

One More SPY Trade

I placed the following trade this morning for the same reasons stated yesterday. Now I have a total of 20 contracts long SPY. Again, I expect to see a short-term bounce over the next day or so. Here is the trade:

Stay tuned for the newsletter out today plus an end of the day post. Kindest, Andy

Oversold S&P Leads to SPY Trade

The broad market index has pushed into “very oversold” territory with two unclosed gaps overhead. Typically when this occurs, the market will experience a short-term bounce. The RSI (2) is reading 2.4 ad the (5) is sitting at 15.6 so I expect to see a short-term advance over the next few days. How long will the bounce last? Well, I do expect to see the gap from today close which means that a move to the $107.07 level should be reached. However, if that does occur over the next day or so I expect to see further declines so I would not be surprised that once I get out of my trade today (see below) I will most likely step back into another one that leans towards the short side of things. There were a few times today that I thought SPY would push higher to close the gap from today, but the bears stepped in each and every time at the $106.30 area.

I have also been looking at a few Iron Condor trades, but I will save my thoughts until a later date.

I hope all of you are having a wonderful start to the week and stay tuned for my newsletter tomorrow.

Until then have a wonderful night!

Kindest,

Andy

Timber! Anticipated Market Decline Kicks Options Portfolio Higher – Up 72.0% Since Inception in May ‘10

Okay, I started this post yesterday, but I decided to take my daughter swimming rather than finish the post. Warm days are numbered here in VT, so I hope all of you understand. I will be working on my paid service over the next week so stay tuned as I will be trickling out info each day. Feedback is more than welcome. I want to offer a unique service that hopefully will be helpful to all.

The following closing trades were made today:

As you can see from the trades above (directly from my ThinkorSwim account), I closed all of my open trades after yesterday’s decline. As a result, My Options Portfolio has advanced 72.0% (commissions included) since it  was established in early May of this year with a win ratio of 81.0%. Here are the results – My Options Portfolio. As I have done in the past, I will post all of my August trades once the month has concluded.

I built quite a large short position with almost 100% of my portfolio at work. That is a rarity as I typically have at most 30% at one time and oftentimes less. Position-sizing is key! However, I stuck with my conviction as Mr. Probability was hitting extremes and when that occurs, as a high-probability, mean-reversion trader I have no choice, but to take the trade. Once again, position-size, risk management and the few technical/sentiment indicators that I follow paid off. Yes, patience, once again, pays.

I am now up roughly 20% in the month of August and will most likely finish the month higher, which will make it four straight months of gains. Again, my goal is not to try for outlandish gains, but Mr. Probability has been rather kind since I enacted My Options Portfolio. One thing is certain, I can’t complain.

I have had quite the interest over the past couple of months in offering a paid service, so I have decided to do so, but I need to decide which would be the best way to go about offering my services. I do know that I want to keep it small (50-100 subscribers), because I want to be able to answer in a timely manner any and all questions that my subscribers might have regarding My Options Portfolio or any options related questions for that matter. I learned from working at a prestigious medical device company that quality is key and that is exactly the type of service I want to offer – a quality-driven service that caters to my subscribers every whim. I will most likely offer a free trial period to work out a few of the kinks, but one thing is certain, my trading will not take a back seat. If I see that my trading is being jeopardized I will not hesitate to cancel my service. Again, I want to offer a service built on simple, quality-driven, options strategies.

Please do not hesitate to email me with any questions, feedback, or concerns that you might have.

Kindest,

Andy

Still Holding Strong – S&P Could Finally See the Highly-Anticipated Reprieve

My short positions (SPY, TZA and IWM) made it through Fed day with a small gain, but the next couple of days should tell me if my recent short-term speculation is correct. Mr. Probability is on my side, so I like my odds, but as we all know as traders/investors, there are no guarantees in trading. A high probability is never a guarantee, but that is all I have as an edge in my style of trading (high-probability, mean-reversion trader).

I have to say that I am actually more confident in my current position then I was coming into today. I thought the Fed reaction could stop me out of my trade with a breach of the 1131 area. However, in my opinion, even thought the pop after the fed release was bullish over the next few days I expect to see some decent selling.

Overhead resistance has become extremely difficult for the bulls to overcome and we have several short-term bearish indicators appearing. Moreover, we typically see a sustained reversal after the initial reaction which would mean that the next few days should be bearish. Even more, the next two days are the two of the weakest days on a seasonal basis in August.

The futures are down 4.75 as I write this. When I started the futures were lower an encouraging 7. I am still watching the gap to fill at the $110.86 level. Once that is filled I intend to start scaling out of most of my short position.

Oh yeah, I almost forgot, today was also a Bradley Turn Date. Hmmm.

Until then have a wonderful night!

Kindest,

-A

Pivotal Day Tomorrow

Tomorrow brings the always  highly anticipated FOMC announcement. One thing is certain it should be a market mover. Will the news lead to a push above what has been strong overhead resistance at the 1131 area or will the major market index finally take a reprieve after an enormous gain in July and early August.

The broad market indice, S&P 500 (SPY) has pushed near an overbought state with strong overhead resistance overhead. Since gapping up last Monday (gap has yet to close at the $110.86 level) the S&P has tested and failed to push through the June 21st high of $113.20. It came close today, but like every other time, the bulls did not have enough to get the major market index over the hump.

So, where does My Options Portfolio stand at the moment. Well, I am almost 100% short at the moment, but will exit all trades if the market is able to push and hold above the 1131 area on the S&P.  Currently I have losing positions in IWM, SPY and TZA, but a short-term move lower (holding until the gap close from last Monday) will certainly puts most of my positions back in the black.

There is no doubt that the last few weeks have been frustrating as a trader. I have been adding more and more short positions after the gap up and inability to push through resistance. There are so many short-term bearish indicators that are popping up that I can’t help as a high-probability, mean-reversion trader to take a position. Of course, even with Mr. Probability on my side, there will always be the occasion when an outlier occurs and I will certainly take a hit (some bigger than others), but as long as I am able to handle to risk-reward in a disciplined way and understand that in highly-leveraged investments such as options, volatility in My Options Portfolios performance will be high. This is an accepted fact that I am comfortable with in my trading endeavors.

So, with that being said, I hope that tomorrow is to my liking because I certainly enjoy profits rather than losses.

Have a wonderful evening!

Kindest,

Andy

Another Interesting Week – New and Old Portfolio Positions

First, I would like to post my late day trade in TZA (Smalll Cap 3x Bear Shares).

I am now almost fully invested on the short-side with a total of 57 puts scattered among IWM, SPY and TZA.

Today was another bearish tease with the unemployment numbers failing to meet economists’ expectations which led to a large decline that lasted throughout most of the day. However, much like the last few bearish days, buyers stepped in and pushed the market higher by days end. The recent price action has certainly been frustrating, but the probability of a continued move to the downside is still quite high.

Bearish Camp

Yes, the bears have had a difficult time holding back the bulls recently. Although, it looks as thought we could see some decent selling as we enter next week.

According to Jason Goepfert of the reknowned SentimenTrader:

Historically, when the S&P opens below the prior day’s low on a bad miss in the Payroll report, it suffers even more through Monday.

Nonfarm Payroll Report

The big news today is obviously the Payroll report, and even more than that, the market’s reaction to it.  The usual tendency after a big knee-jerk move after the release is a “fade” if the market closes strongly one way or another.  So if we get a big rally, the market tends to drop during the following session(s) and vice-versa, especially if prices are near a multi-day extreme at the time.

While the situation is very fluid, so far the S&P appears as though it will open below yesterday’s low on a worse-than-expected Payroll number.  The table below shows every time since 1998 that Payrolls came in more than -50K below estimates and the S&P opened below the prior day’s low:

Date	Miss	Open To Close	1 Day Later	1 Week Later
05/04/01	-238	3.0%	2.1%	1.2%
07/06/01	-64	-1.9%	-1.3%	0.8%
09/07/01	-68	-1.2%	0.0%	-10.3%
12/07/01	-131	-0.3%	-2.2%	-3.2%
12/06/02	-75	2.1%	-0.7%	-0.9%
03/07/03	-318	2.1%	-0.4%	3.1%
03/05/04	-109	0.8%	-0.4%	-2.5%
08/06/04	-208	-0.7%	-0.6%	-0.4%
10/08/04	-51	-0.6%	-0.2%	-1.7%
02/03/06	-57	-0.2%	0.0%	0.1%
09/07/07	-104	-0.3%	-0.5%	1.7%
01/04/08	-52	-1.4%	-1.5%	-2.2%
03/07/08	-83	0.1%	-1.3%	0.0%
12/05/08	-198	5.1%	8.8%	6.4%
07/02/09	-102	-1.5%	-1.5%	-3.5%
10/02/09	-88	0.5%	2.0%	5.1%
06/04/10	-105	-1.7%	-2.9%	1.0%
Median		-0.3%	-0.5%	-0.1%
% Positive		41%	29%	47%

We can see that it was tough for buyers to step in on such a shock on both a fundamental and technical basis.  In fact, through Monday’s close, there were really only two times the S&P managed to rally by any meaningful amount.

When we add one more condition, that the S&P was trading near a one-month high the day before the Payroll release, then only two days popped up – December 7, 2001 and March 5, 2004.  While it’s very hard to rely much on two precedents, it’s telling to see how the market reacted when we were coming off a high, and suffered this kind of fundamental/technical break.  Both times, the S&P went into at least a 5-day decline.

Furthermore, we have yet to fill the gap in the S&P (SPY and the /ES)from Monday which should also weigh heavily on the market.

So, as you can see I am leaning heavily towards the bearish camp and have been for several days. I will continue to do so until the recent high is broken in the /ES. I will also look to exit or most likely scale out of my trades when the S&P is able to fill the gap which is around the $110.80 mark in SPY.

I will be back with more this weekend, including the my new paid newsletter service, which will include real-time trade alerts that mimic the trades in My Options Portfolio.

Until then I hope all of you have a wonderful night.

Kindest,

Andy

A Few More Puts to Add to My Position

I just added a few more SPY puts late this afternoon to take advantage of the short-term overbought state of the major indice plus the unfilled gap from yesterday. I will look to close part of my position once the gap fills at $110.86.

Here is the trade:

My Options Portfolio is now roughly 70% committed to the short side. Again, I will be watching to see how the S&P reacts around what has been a strong area of overhead resistance. We could blast higher from here, but we could also move significantly lower. Of course, as you can tell from my recent trades I believe in the latter.

I hope all of you have a wonderful night.

Kindest,

Andy

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