US indices futures retraced to two days' low range overnight with European market in negative territory. The next balance area is between 1990 to 1950. It's likely that we may see an retrace in ES if we break below 1996. I plan to use this pull back to add some puts in my other accounts to form ICs. I will continue to deleverage my main account. Also I want to continue to test the straddle strategy back tested by Frank to see if I want to implement it.
It was a wild day as the indices broke both overnight high and lows, also both last two days' highs and lows. SPX and RUT closed with a bearish engulfing. It appears the bounce back is over for now. I made most of my puts side of ICs in other accounts. I may be too early as it was the day one of reversal. I will be more conservative moving forward. My leverage is down to 3.5 and margin ratio is at 71%. It needs to be below 50%. The calls and puts are balanced after today's reversal. Now I have to watch the puts side.
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