Indices retested their lows of yesterday early in the session and bounced. ES has had two consecutive 50 point range sessions. It appears a double bottoms held for the time being. Weekly chart still looks bearish but not finished until tomorrow. Tomorrow is this month's options expiration day and usually wild. I would exit my VIX 23, 25 and couple more bull put spreads if we get another decent bounce. I may also sell of bear calls which I didn't get fill today except a set of RUT 1160 bear call spread in Etrade. I closed this week's SPX bull put spread of 1850 for a 1X loss. I followed my plan and feel good about it. I will become a successful trader only when I can follow my rules decisively.
Soybean and corn had a slight up day but are still a consolidation mode. Wheat popped another 10 points on Australia weather and Brazil wheat demand. I feel so bad to let most of my winning puts become lessors just because I believe they will go down after last Friday's USDA report. I refused to change my market views when prices kept going up and seasonal windows passed. I was heavily influenced by Arlan and Walsh's "expert commentaries". The retest of lows may still come but not in my time frame.
My plan for tomorrow:
1. ES/SPX, We may still get a range day with upside bias due to the option expiration. A downward test is also possible with any bad new and the market is still nervous. Many people think the selling is not over yet. I looked back SPX pull back from 2012. Most of them lasted 4-6 weeks. We are in our 4th weeks now. My ES/SPX estimate of tomorrow's range is low at 1836 and high of 1890 for ES and +6 for SPX. I will sell bear call spread at my levels and try to exit losing positions in Etrade and IB personal when we push up. I may sell put far OTM and time if we can hold today's low and margin allows.
2. VIX. I will take stop of 23 bear calls at 2-2.5X losses tomorrow or no later than Monday.
3. Grains. I will close as many put positions as I can. I may then buy some calls for next month if grains price pattern hold. It may be better wait until Monday to void weekend time decays.
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