August 22, 2017

Possibly entering unchartered territory

Standard & Poors reported a negative outlook on bond insurers.

The S&P seems to have found decent overhead resistance at the 1465 level so I would like to see a sustainable push through that level and if that happens I think we could see the 1490 level again in the short-term.

Bearish November Leads to Bullish December“. Basically, I went back over the last 30 years to see how December typically reacts after a bearish November. Interestingly enough there have been 8 such occurrences (bearish Novembers) and each one was followed by a bullish December. That precedent looks to be broken unless the market can rally 2.5% over the next 6 1/2 trading sessions. It is certainly not out of the question given the bullish seasonality that we are currently in, but I am starting to have my doubts. A move above 1479 on the S&P would get us there. We shall see soon enough.

As you can see from the chart below our current SPX Iron Condor position is once again well within our chosen range for the expiration cycle. I just wanted everyone to see just how wide of a range that we have been using since we adjusted the strategy after our last loss. If you think the S&P will not move more than 8.5% – 10% (percentages vary depending on our chosen range for the expiration cycle) then I urge you to take a look at our Iron Condor strategy. Even with such a wide range we will still make roughly 8% every four weeks. Please do not hesitate to email us with any questions that you might have.


Overbought/Oversold for December 18, 2007 

S&P (SPY) – 37.0 (neutral)

Russell 2000 (IWM) – 48.2 (neutral)

Dow (DIA) – 34.0 (neutral)

Nasdaq 100 (QQQQ) – 28.2 (oversold) 

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