The week of options expiration is upon us

Options expiration is upon us and as it stands all of our strategies, including our new SPY Diagonal LEAPS strategy, should finish up the cycle doing quite well.

We still need to roll our October SPY short positions to November and will most likely do that over the next day or two. As I have stated numerous times over the past few weeks this is probably the most important aspect of the strategy so stay tuned to see how we negotiate the rollover. Theta has really kicked in as it is up to $44 a day. So far the strategy has made $1,194 or 6.0% over the last four weeks. We are very encouraged by the prospects of this strategy and how it allows us just another way to diversify our stock options strategies.

Tomorrow brings “tech Tuesday”. If Wall Street takes the earnings as bearish then we could see a push lower and a move into oversold territory. This would be the first oversold reading in two months and quite possibly the first signal in our ETF Extremes strategy.

As for our SPX Iron Condor strategy, barring a major move, the strategy should be profitable for the second straight month. A few more months like this and we are back in the positive.

Overbought/Oversold for October 15, 2007

S&P (SPY) - 47.8 (neutral)

Russell 2000 (IWM) - 45.7 (neutral)

Dow (DIA) - 46.5 (neutral)

Nasdaq 100 (QQQQ) - 57.8  (neutral)

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