Wednesday, April 10, 2013

Where we are on the SPY

The SPY continues to grind its way higher on the back of investor complacency. As you all know I have been a devoted believer in the rally until recently. We got my minimum expectation of 30 points lower on the SPY and during yesterdays session we traded right back up to highs on the SPY and near lows on the VIX. So apparently there is no fear in the market, but it still just does not feel right. I don't have a huge position on, but with the market up yesterday I was short an equivalent of 60 deltas and was actually up $220 on the day.

Notice in the above chart the range that I drew in blue. Yesterday I decided to put a very wide Iron Condor with December expiry. And those blue lines represent my breakeven points.

Last week I got short JNJ via some putspreads that I covered on Monday with JNJ trading down over a buck. Well yesterday I had an opportunity to put the same trade back on around 10 cents higher than the original trade. This thing is up 15 consecutive weeks in a row and still has a reading of over 81 on the RSI on a weekly chart.

I am only using about 20% of my capital and am going into this mornings open with a short delta equivalent of short 155 shares of SPY.

Good Luck Trading!

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  1. JNJ does look like a compelling short. Unfortunately the SPY just looks like a bull. I don't get it either and would be selling longs if I had any and saying thank you very much. There seems to always be another entry point regardless of directional bias.

  2. I can't help but have short exposure up here. I was longer all of the 1st quarter. But everyone is talking about new highs and doing well in the market...these are people I don't ever hear talking about the market. Just seems like I have to go against the grain for little while.

    I have set the huge range with the Iron Condor in the SPY. I am long vol as I sold some more puts on the VXX and am short the market via TNA which is a triple short ETF.

    I have a few other small positions on...Overall I am short 160 SPY deltas.

  3. Closed out the TNA position this morning for a full profit. Also booked 60% of the profit from the short VXX puts that I sold. I closed out the short puts that were apart of the 2nd entry of JNJ putspread and am now long 5 "Naked" puts. Still think this is on the verge of a nice selloff. Just take a look at UNH, which was another name that I had some short exposure in that after a $3.00 selloff I booked my profits.