Monday Blue 2-29-16

Indices gave up morning gains in the afternoon retrace. SPX closed -0.83% while RUT only fall 0.34%. VIX is back above 20 now. So far it doesn't look too back from the last two down days. However bears could be awakening.

There are 12 trades today. RUT 1030 put was closed which ended the rollover for that strike. I rolled over my RUT 1070 puts to next week again. I may have to pay back some premiums to lower my strike next week or two. Sold 3 naked SPX puts for later March to fill up some empty spaces and free margin. Get to be careful about risk exposures. I may have to sell some hedges to protect these naked positions just in case.

Risk factors are back inline after closing couple of calls and expired positions. Net liq/margin is at 45% and leverage is down to 33.

This month ended with profit of $20K mainly from the recovery of some ITM positions on both call and put side. I am not out of woods yet on RUT put side. Need to buy down in March.

Choppy But Holding On 2-26-16

US indices gaped up overnight as European rallied. ES couldn't break the o/n high during the morning session on this options expiration day. ES/SPX pulled back to yesterday's upper range in the later afternoon. RUT held up pretty well attempting break its 50 SMA. It's hard to tell if bull or bear will gain upper hand next week.

I had 8 trades today. Closed couple of calls for next week and got relief on margin. I sold April 2 RUT and SXP in Kieth style naked. Also sold a set of SPX 3-4 puts cs to fill a void.

Risk factors stayed about the same into this weekend. I will review this week on my weekly review.

Gap One Filled and Popped 2-24-16

As expected ES/SPX dropped overnight and gaped down at open. It went down to filled the 1895 gap left from last week. To my surprise bulls stepped in from there and pushed it up not only closed the gap above but to the mid of yesterday. It was a strong reversal day for all indices. However this price pattern is similar to the one in early Feb resulting in a further downward move. ES/SPX currently are still in a lower lows and lower highs daily pattern unless we close above the double top below 1950, the 50 SMA.  RUT is showing a clear pattern of IHS on daily. It needs to close 1040 to make the pattern work.

There are 10 trades across my accounts. Closed some positions in IB. Sold calls and call spreads in different accounts. I didn't catch any puts as I was expecting further down side movements. I will still have chance to sell April positions.

Risk factors are improved. Margin rate is at 55% which allows me to add positions on both side.

The Gaps Below 2-23-2016

The "Turn Around Tuesday" played out to the down side. The overnight round up lost stem after US open. The 50 SMA for SPX/ES acted as a strong resistance. Crude fall on news of OPEC would not agree on a production cut. All of them worked together making it a -1% day. SPX/ES closed yesterday's gap at 1915 area. There are two more gaps below at 1890 and 1860 areas from the run up last week. We may see these gaps get filled and held before another leg up.

I didn't have any new positions filled other than moving the ITM positions closer to strikes and DTE in hope of unwinding them sooner. I closed another SPX call position so margin is reduced further. I may sell puts in April strikes if we continue to go down which is likely base on today's LOD closing.

Risk factors stayed in the range. Marin is still on the call side but may change tomorrow.

Testing Upside 2-22-16

Sunday night's lower open in futures lifted by Asian and European markets. Shanghai and DAX both closed up around 2%. ES gaped up and finally tested above 1940, Feb's high. It gave back later in the season. Now the question is that are we going to fall from here or follow through. It's a battle zone here near 50 SMA. Either side won't give up so easy.

I had more positions closed on both side today. Tried sell some calls but no fills. I am more patient now and rather wait for the price come to me. It's fine if I don't get to trade on a particular strike date.

Risk factors are inline now. Net liq is back to 200K for the first time since last Oct. Margin ratio is slightly above 50% and leverage below 35. I am ready to add few more positions on either directions. Margin is still on the call side for now.

Week 8 Review 2-20-16

It was the best week gains for US indices in 2016. SPX and RUT gained 2.9% and 3.9% respectively. The IHS patterns of SPX and RUT are still forming on the right side on daily chart if they can hold an retest of their necklines. Sentiment is bearish with many pros predicting another leg down nearing. Technically it's still a lower highs and lower lows on daily unless the Feb high is broken and held. Bulls have shown signs of tiredness in the last 2 days. Friday was quiet with monthly options expiration.

Most of my positions ended positive except the deep ITM rollovers with collected additional premiums. The realized P/L is $6350. I was able to reduce my put positions with the up move of the market. Most of my put positions are in safe distance other than the deep ITM of RUT 1070, 1080 and SPY 197. I plan to spend some premiums to reduce my ITM positions next week.

I didn't complete my plan to learn TOS risk projections from last week. I roughly finished my sheet of trading size calculation. I should have only two CS for SPX for 7-8 weeks, or should I just monitor Net liq at 40-50% as Karen mentioned?

Weakening Rally 2-19-16

Indices had another small range day. Despite holding selling pressure SPX/ES couldn't move back to yesterday's range. RUT barely got into the lower end of the prior day. Both indices chopped in a CHVA with bearish signs. It's a little strange no to see wild movement on this option expiration date. VIX dropped to 20.5, near the Feb 1 low again. There may be support area to hold the floor. We will see if the bear will come out early next week.

I had eight orders filled with only one new position today. There will be more ammo to use for next week. I forgot an order of closing both sides of Feb 5 in IBP for $50 placed days ago. It was a risk off measure when market was a little shaky a week ago. The order got filled at open this morning. I don't even remember seeing it yesterday when I was in the account. It could do a lot better if I had remembered it.

Risk parameters are back to normal. Net liq is at 50% and leverage backed to 35. I am still struggling on deleveraging DITM approaches. Will work on it next week.    

A Day of Pause 2-18-16

Market took a breath after three day of 3.5%+ bounce. SPX touched Fib 38% yesterday on weekly and the pause is expected. RUT still has some way to get to that level. It looks like a IHS forming on both SPX and RUT daily after the double bottom retest last week. Many pros still hold bearish view for the market. But Mr. Market tend to fool most people.

I spent most of my day rolling my RUT positions of this week. The deep ITM 1070 puts in ET were very hard to roll. I had to split the three positions into two orders in different expiration dates. I may have to give back some premiums at end of this month to bring down 1070 strikes. There are total nine orders today. I closed more call side and rolled over puts.

Risk factors improved except the available fund is down due to expiration. I collected over 1K premium including ET.

Short Squeeze Continues 2-17-16

Indices booked 3rd 1.5%+ up day. The short squeeze continued. S&P has gained more than 5% in last 7 trading days. It only occurred 36 times in the last 60 years. It should qualify as a dark grey swan at least. Many people think that's enough for the upside. But we will never know. There was 7 continued up days last Oct as I remember.

Couple of my calls in SPY are threatened too. I closed more puts and calls in RUT. Sold two SPX bear call for March 5. I have been watching my margin closely. I don't want to over extend it. I have learned my lessons in last August and Oct. It can hit you in both ways.

Risk factors improved somewhat. Marin is up to 46% of net liq. Leverage is at 39. I have several RUT positions ITM need to be rolled over tomorrow. It's going to be a battle since I have a set of 1070 RUT puts spreads is deep ITM as the current price is at 1011 only. I need to think different options for this position.

A Follow Through Day 2-16

Indices made another nice advance following last Thursday's retesting Jan low. ES/SPX and RUT went up 1.5 to 2.6% respectively. It will be still a pull back unless ES/SPX break and hold above 1940.  RUT broke recent high. It often leads the trend to the low or high. Get to prepare for both scenarios.

I closed some puts today with profit of 70% or more. I don't want to be caught in another down thrust. No any sell order got filled.

With the long weekend decay and up thrust my risk conditions improved. Net liq and available fund are up. Leverage is down to 40. I will try to close more riskier potions tomorrow should we see a range day.

Week 7 Review 2-13-16

ES/SPX retested January low of 1810 area on last Thursday while RUT made a new low of the year. US indices made a near 2% pop and took out last Thursday's high on Friday. Let's see if we get a follow through next after the retest of double bottom.  The down trend remained intact so far.

The week ended in red of -$752 after I rolled over the deep ITM SPY 197 puts to March 3. That's where I could get some decent premiums for the same strike. I also had to roll RUT 950 puts which was hoping around ATM on Thursday. With a three days long weekend I should get extra decay. I should be able to reduce some positions next week.

Risk parameters are still elevated. Net liq and margin ratio was below 50% and leverage was above 50 every day of the week on increased VIX and over sized positions. I need to lay out a size limit for each week to see what's my margin allowance.

Relief Day One 2-12-16

Following yesterday's retest low and a not very strong reversal futures continued to drift up overnight. During RHT ES touched yesterday's high then continued to move up and made a daily high at closing. Indices made near 2% across the board. This is the day one of a possible relief rally. Let's see if it has enough energy behind it or could be a HS formation for another leg down.

I didn't have any trade until the last hour of the day. Sold calls in each of my trading class and closed an ES put. An after hour filled in SPX call switched my margin to the call side.

Risk factors stayed at a similar level. Margin is at 40% and leverage down to 51 from from 65 yesterday. VAS and ES are high. Overall I still have too many positions. I should calculate my margin safe levels and allocate them to each period. That will be a more systematic approach. I may work on it this weekend once I get my car and water heater problem resolved.

A New Low Of The Year 2/11/16

Futures continued going down after closing. European market dragged it further. ES made a new low of the year at 1805. It bounced from there but didn't make a strong reversal like in January. Gap remained open above. The globe market is in turmoil.

I had to roll over RUT 950 puts out to next week since it was in and out of money all day. I collected some nice premiums though. I also rolled SPY 197 puts to March 3 because it is deep in the money. There was no near by contracts could give me any extra premiums.

Leverage remains about the same as yesterday despite three closed call positions and rollovers. I will continue to deleverage.

Yellen Didn't Inspire 2-10-16

As expected market went ups and downs as Yellen was talking.  Indices fall to new low of the day in the final hour. Market was disappointed that she did't imply that Fed would hold off raising rate this year.

I didn't do much trading except closed couple positions on both side. I have more patience now. I also had to deal with the water heater leaking problem. Risk remain elevated as yesterday. Yellen will speak again tomorrow in front of a Senator hearing.  I better stay out of it.

Indecision 2-9-16

Futures drifted down overnight on 5% down of Japanese market and Europe sell off. Trades tried low and high of yesterday but got rejected on both sides. Maybe the market is waiting for Yellen's talk in Congress for the next two days. Technically SPX and RUT are in squeeze channels in 4 hrs and daily charts. A bear flag pattern is also exist. CL dropped below $29 and closed around $28.5. A breach of January low is likely for SPX as its counterparts already done so.

I sold some calls during the attempted rally late afternoon. Margin switched to call side again. I sold couple more naked calls than I should have. It costed buy power dropped below 30% for awhile. I then closed couple low priced positions to bring my BP up.

Risk factors remand less ideal. Margin ratio is still at 36% and leverage went up to 60. I need to reduce my overall position size. I have traded 192 contracts for Feb which is about the same number for the entire Jan.

Sell Off Continued 2-8-15

I got fooled when US futures didn't gap down last night. I didn't have a clear plan to hedge the down side as I was hoping to see an unexpected bounce. Well, hope is not a strategy. Futures got crushed after European market open. ES was already down 1.5% when I woke up this morning. I didn't buy any VIX or short ES as I was thinking during my weekly review. We saw another 2-3 % drop today only recovered half later afternoon. The selling appears not over yet. We may see an retest of January low for SPX before or after Yellen testifying on Congress. Nasdaq and RUT have done it already. Nasdaq gaped down below it today.

My focus was keep my risk on check and maintain my margin balance. I lost over 20K available fund since indices gaped down after open. Maybe because of my many put positions the 1:2 hedge wouldn't reduce my margin. I placed some sale call orders just to be ready in case a bounce. Some of them got filled in later afternoon. Now margin is back to the call side. I am glad I didn't release all of my call orders. These calls ate a chunk of margin when it got switched to the long side.

Risk factors increased. Net liq/bp ratio is down to 37%. It doesn't leave much room for me to add positions. Leverage jumped to 56. It was above 65 during the heat of selling today. I will reduce some positions in both side if we get a slow day tomorrow.

Weekly Review 2-6-16

Indices ended with a negative note this week. They registered a losing week after after recovering for two weeks. SPX, RUT and NASDAQ closed on lows of their daily and Weekly. It looks like the selling pressure has returned. VIX is up the the week but not quite elevated yet. It closed at 23.38 and not backwarding with VIX futures. I am thinking about getting long with VIX products and puts early next week expecting a possible retesting January lows.

It's a small profitable week with $1420 realized gains. Risk factors has improved. Net liq and margin is above 50% but leverage is high at 48. My concern is there may be blind spot in my risk monitoring. I will try to learn and set TOS risk parameters as my 2nd monitor.

Back Into Selling Mode 2-5-16

The Dec NFP came out 151K vs 189K expected. Market wasn't too excited until RTH started. The selling accelerated in the afternoon.  ES/SPX and RUT lost 1.8 and 2.8% respectively. No matter what the NFP number is the market could interpret it as a bad news. The bears would sell it if the number is better. Because it could mean FED would be more likely to raise the rate. It the number is bad then the fear of recession would take over.

I had 23 orders filled today. Most of them were closing call orders in the AM. My Feb 1, SPY 185 puts were closed with 1c. When selling continued after 1pm I started to put in more put orders trying fill my march 1-5 spots. I got a little more than what I wished for. I am glad I held couple SPY and SPX puts orders without releasing them. Later afternoon when I saw Wednesday's lows were threatened I started to sell ratio credit spreads in 1:2 long to short puts to hedge my margins. This method has worked so far in a none crash style selling this year.

My net liq and buying power ratio stayed above 50% with these hedging positions. Leverage went up to 48. VAR and ES are above 70K which is bit too high. I will take off some short puts early next week.

Awaiting for NFP Friday 2-5-16

US indices didn't go much further in either direction after their early exploring up and down. Neither bull or bear would commit before NFP tomorrow. Would a bad news be good or the other way around? Technically B Bands are in narrow channel in daily and 4 hr for both SPX and RUT. We may see break out one way or another tomorrow.

I had only one close out trade in SPY calls today. I missed the morning movement while looking for car trouble solutions. I may have plenty to trade tomorrow since I have only 2 positions expiring.

Risk factors remain the same. I have some firing power to use tomorrow.

Retest BOJ B/O Point 2-3-16

It was a hairy down move this AM after a nice pop overnight. With less than expected Service PMI both SPX/ES and RUT took out their lows of BOJ break out day. They stopped at the IHS neck line formed on Jan 20. CL closed up 8% despite higher than expected crude inventory. Then a big reversal came at 3pm. It looks like a successful retest of the neck line and BOJ b/o point. We may see some upside movements from here. Of course anything can happen overnight.

I had 20 filled trades on both side. Some bear call orders got filled on the way down and new ones filled on the way up. I sold some Feb and March puts and CS as well. I may have sold bear calls too early. But I held off the temptation of selling more.

Risk factors stayed in line, similar to yesterday. Margin is still on put side which may give me a little more room to add calls and exit puts on target.

FOMC 1-27-16

Indices cleaned upper side of current range this AM. Then they quietly waited for FOMC announcement at before 2pm. Fed didn't raise the rate as expected. People were reading tea leaves of the words in Fed's statement. Fed seamed not paying much attentions to the current market volatility in the US. Market tried to go up then failed to hold yesterday's lows. So far the inverse HS pattern still hold. VIX spread is very small. The bottom of 1-20 looks fine fore now.

I followed my plan to deleverage my positions today. I closed some calls and puts in ES, SPX and SPY. Several of my protective 1:2 credit spreads got filled after 2pm. I didn't exam them after the announcement. I was busy paper trading ES to get the excitements and got slapped up and down. I need to recognize my emotions during the big market swings and remind myself to stay calm.

Risk factors look much better now. Available fund is up to $89K, near 48% of net liq. VAR and ES are down $13K. But leverage is up to 44. I suspect the protective CS are adding leverage numbers since they increased my positions. Margin is switched to the puts side now due to today's thrust down ticks and closed call positions.

Turn Around Tuesday 2-2-16

The short term effects of BOJ neg rate is over as of today. Indices gaped down this AM and didn't get much recovery.  SPX and RUT lost 1.88% and 2.25% respectively. The B/O area on BOJ news were tested before end of today. It appears that CL and stocks are linked again. CL is once again below $30 and retesting last week's low. Based on today's closing and price structures we may see another leg down if the b/o area couldn't hold which is around 1870 for SPX and 990 for RUT.

There were 10 trades filled today. Closed some calls and sold some puts and calls. Most of my March put spreads didn't get filled. I tried not to chase the fill. I may have another chance tomorrow or the day after. Keep in mind that I control my risk and pick the area I want to do business with.

Risk factors remained about the same as yesterday. I have some ammunition to fire should we get another let down.

Resting on Monday 2-1-16

Indices tried to break out high after a slow morning. They tried to rally later afternoon but got knocked back to last Friday's upper range. We may see a retest of the break out area soon. I may use the resting to sell some puts since margin is on the call side. It was a slow day for me too. I closed a SPY puts and sold a naked RUT put.

Risk is inline. VAR and ES are still elevated but fund is at 50%. We may see some actions tomorrow.