My hypotheses of downside for indices played out to the extreme today. Indices gaped down over 2% this morning. ES/SPX reached 3% down on 2nd push before Fed Beige Book at 2pm. I wasn't prepared to see such nasty sell off. SPX recovered 2% of its loss from 1821 to 1862. My margin was below $30K at one time. I closed some of my grain positions with a small profit to raise my margin. It looks like the low of this sell off is in if bulls can hold it on an retest. SPX is still hanging on the 50 SMA weekly which I mentioned as a support twice since June, 2012. I didn't get any chance to exit my credit spreads since the gap down overnight. One shortcoming of trading SPX is no overnight session to prevent a big gap up or down.
Grains have shown some weakness at closing today. But they short term uptrend is still intact. I closed couple wheat and soybean puts to free margin and lock in some profits. I also bought calls in each of my grains to hedge my heavy short positions.
I will exit SPX 1800 spreads tomorrow either way. This Friday is monthly expiration and it could go wild. Previously they were up most time but this time was a down trend. I will observe the price actions tomorrow. I may also close my 1860, 1850 put spread at b/e or a small gain just to step aside.
I want to exit most of this month's puts in grains. I kind of suspect the pros have been reloading short while squeezing others out. Of course my 1st objective is to preserve capital. All of my corn put profit slipped out. That is a hard lesson due to my ignorance.
No comments:
Post a Comment