August 19, 2017

SPX Short Iron Condor and Short-Term Overbought

The market continued to consolidate today as the major averages held steady. We should see a break out of the short-term range over the next few sessions. My guess would be to the downside, but given the strong nature of the bullish camp I would tread lightly with any short positions.

As for our SPX Short Iron Condor strategy, we were able to establish a position for the May expiration cycle that would allow us a 6.8% gain over the next four weeks as long as the underlying SPX settles between 1415 and 1550. A neutral-based strategy with long-term potential. But, as we saw last month, capital preservation and asset allocation are key factors when implementing this strategy. As the old adage goes “never put your eggs in one basket”.

Subscribers can check out our full position and trade summary on the Insider’s page of the site under Condor trades.

Overbought/Oversold levels for April 24, 2007

  • SPY –  76.9 (overbought)
  • DIA – 83.6 (very overbought)
  • IWM – 66.2 (neutral)
  • QQQQ – 84.4 (very overbought)
  • GLD – 47.6 (neutral)
  • OIH – 53.7 (neutral)

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Have a great night!