A Turn Around Tuesday 1-31-17

It appears that turn around Tuesday played out. RUT refused to go down with SPX which was an indication of the underlined strength. RUT closed up 0.66% while SPX erased most of its loss. Both of them parked on their upper side of balance areas. We may see a FOMC rally. MACD and RSI are tangled in mid as well. 

Made 6 trades today. Sold 2 SPX puts CS for clients. My orders didn't get filled. I filled an IC 2 put side for RUT in ET. No trade in IB. Rolled an RUT ITM call for client. I neglected to actively hedge my margins as the monthly options expiring today. Available funds are down to 13k tonight. 

Net liq gave back 9K with RUT's 0.66% pop. Margin ratio fall to low edge as well. I will have to hedge my portfolio aggressively before FOMC tomorrow. 

Uneasy Politics Affecting Market 1-30-17

The country is divided on the executive order of banning certain Muslin countries travelers into the US. There were protests and statements from tech companies against the ban. Market gaped down on this Monday. SPX and RUT lost 1 and 2 % respectively at the highs of it but recovered partially before closing. RUT is back to the low of its current range while SPX closed on top of its prior range. I don't expect the drift down will go to far during the earning session unless Wednesday's FOMC surprise the market.

Made 5 trades today. 2 rollovers and 2 ratio hedges. Also closed my USD long trade. Despite the fairly large drops none of my put sell orders got filled. It really tested my patience during the day. I may get another shot tomorrow.

Net liq increased 14K to 151K. It put me back in the safe zone for now. Margin ratio is above 40% after added new hedges to replace the expired ones. Margin is still on call side. Will continue to hedge and reduce cost.

A Day for Breather 1-26-17

Market took a pause today. SPX closed barely down a bit still holding at high. RUT pulled back 0.5%. It stayed within its balance area. MACD of RUT is crossing up, indicating a possible of another leg up. I got a little breath room today. It may not last long unless the other indexes retreat from their ATHs.

Made 7 trades today. Rolled out 2 ITM RUT calls expiring tomorrow. Bought back the last 50 shares of SPY at high just to reduce margin and possible further squeeze. Made couple hedges too. Margin switched to the put side for now. Finally collected a little over $270 premiums, ending a 7 day no premiums record.

Net liq got a 6K relieve. Margin ratios are at a OK level. Tomorrow's GDP, durable goods order and earning report may boost market if they are better than expected.

Bulls Are In Control 1-25-17

Indices gaped up from overnight. SPX/ES hold the new highs firmly. Looks like another leg up is in play. On the other hand RUT hasn't break to its new high although gained near 1%. I expect RUT will soon to break to a new high if no unforeseen event interrupt it.  DJ finally broke that 20K mark and holding it. The animal spirit is back on.

Made 2 trades of ratio hedges only today. I put some rollover and exit orders on but no fill yet. I will try to sell some far out of money calls when prices come to my level.

Net liq got hit with another 14.6K again today. I have only 20K room left and RUT hasn't even made new high yet. I may have to get some funds back from ET before end of this week. I realized that my size is still not small enough to withstand a big market surge or drop. I will roll back to some small ETF and stocks to reduce my size and spread my risk.

The Upside Played Out 1-24-17

Like the old saying:" When it couldn't go down then it will go up". A turn around Tuesday played out after market couldn't break to lower boundary on Monday.  SPX made another ATH of 2284.5 with a 0.66% gain while RUT advanced 1.54%, closed above the mid of B band. Next we need to watch if the new high will led to another leg up or if it may get knock on its head.

Made 10 trades across the board. Most of them were hedges for my account. Sold couple March 2 and 3 bear calls for clients. They turned out to be too early. I didn't expect a break out for today. As the opening was slow and choppy.

Risk profile got hit again. Net liq lost 1.7K plus I transferred 7K to ET as part of pay back loan. I may have to borrow it again if the rally continues.

The Bottoms Held So Far 1-23-17

Indices made another attempt to break their current ranges to the downside but bulls stepped in to hold it at few ticks below last week's lows for SPX and RUT. We may see if it's the sprint board for another leg up or bears will keep selling until the bottom breaks.

Made 4 trades today. Two ratio hedges and two closing puts. No premiums collected for a third day now. I was expecting RUT make a 1% down but it didn't come to the level I wanted to sell. I will wait for it come to me. Let's see if a turn around Tuesday comes to play after today's not very strong rejection.

Net liq increased 54K on a - 0.31% drop of RUT.  Margin ratio is back to the acceptable level after adding 2 RR ratio hedges for next week. I will buy more hedges towards end of the week.

Awaiting For Inauguration 1-19-17

Indexes were choppy and explored the down side of their current balance area. Nothing is broken by closing. I suspect that market is building energy to try for another leg up if the inauguration speech provide some clarity of policy issues and market likes what it likes. If it break down instead it will be to my advantage.

Made 4 trades in which all of them were hedges in both side of RUT. It was the 2nd day without collecting premiums. It's OK to stay on the sideline waiting for a major event to unfold.

Risk profile looks better with RUT's 0.9% retreat. Net liq popped 10K. Unfortunately these gains are easily erased with a 1% up in RUT since I don't have any OTM bear calls. Let's see what tomorrow will bring.

Not Ready To Break Yet 1-18-17

Indices held yesterday's lows and had a small ranged choppy session. There have been more talks about a possible drop after inauguration day. I suspect market could bounce up from here if the retest lows are held. Market tend to surprise majority of people. I just need to wait for market to show its hand. I don't have any position that is near or out of the money on the call side for the next two weeks.

Made 3 trades today.  Half of my UUP positions was hit with trailing stop. Sold an ratio hedge of RUT to the put side and margin got switched to the bear call side again. No premiums were collected.

Risk profile remains steady. Ratios are down slightly as RUT and SPX both moved up some. I will have to buy more hedges to reduce margin before end of this Friday.

Test To The Down Side 1-17-17

Market took a down turn opposite to last Friday's up tick. RUT led the down side test after MLK long weekend. RUT closed down 1.4% while SPX shed only 0.3% holding on 2265 CHVA. Both indexes are still in their current balanced, narrow range. The almost two week old squeeze pattern will results break out one way or another soon. The phrase on the market is "buy the election and sell the inauguration". I am not sure if the bulls would give up so easily. Anyway, the recent range bound and weakness helped me out. I have recovered some of my paper loses and rolled up many positions so it will be less harmful when and if there is another leg up.

Made 18 trades across the board. Sold some bull put CS and rolled some ITM bear calls. Also made hedges in RR ratio and ratio puts to bring up available funds for next week since the prediction was going to be negative after this week's expiration. I am glad to exit the 1390 bear call at my target. I had the urge to change my target but held it off. On the other hand I didn't hold the 1330 until end of this week as I planed. It may have a chance to expire this week if RUT break down from its current balance area.

Net liq got a 18K boost. Margin ratio is at health levels of 94 and 48% for now. I may be able to pay ET back some more of the loan before end of this week.

A Surprise Drop Off 1-12-17

Based on yesterday's closing I was expecting another push to the upside this morning. When market started to sell after open I thought it was the usual pattern of test lower then buyers take over. Instead market pushed down for about 3 hrs. RUT made about a 2% low while SPX had -0.8%. It then turned into a grind up in the afternoon. Both recovered more than half of their lows. The earning session started that could boost the market's expectation.

Made 7 trades today. The first Ratio RR was based on my expectation instead of the reality of the market. I was afraid RUT would quickly bounce 10 min after the open. My subconscious reminded me it was too early but I placed the order any way. It was the same pattern all over again. Next time I need to pause when my subconscious is telling me something. I must consciously change my bad habits. I didn't sell any regular CS instead made up some IC 2s for existing positions.

Net liq recovered 13K. The predicted liquidity is back up after the RR ratio hedged calls. I still don't have any call positions that could be exited until next week. I expect the current net liq could sustain 2-3% up swing. So I paid another 3K back to ET today.



QOTD: Change is hard at first, Messy in the middle and gorgeous at the end.  

Firm Up 1-11-17

Market followed the Tuesday turn around. Despite the sell off of the Med and Biotech during Trump's news conference buyers pushed indexes back into positive territory before closing. B bands for SPX and RUT are in squeeze mode which may cause another pop. MACDs for both are finish the down curve as well. I may face another round of squeeze.

Made 4 trades today. Two of the Ratio RR for RUT were filled during the conference drop luckily. One IC 2 in ET rollover collected some premiums. It was a quiet day in consolidation. I need to stay calm during ups and downs of the market. I also noticed that I tend to guess if my order would get filled or not instead I should stick to my rules of engagement.

Net liq was dragged down another 4.3K to 139K. Margin ratio came back above 50% mark. The predicted post expiry is in yellow line again since I have 9 of RUT call hedges will expire on this Friday. I will have to add more call hedges to it in the next two days. Until I can take off bear call positions of my holdings I am on the mercy of every small move of the RUT and IWM.


 

Turn Around Tuesday 1-10-17

The divergence reversed today. RUT went up 1% while SPX gave up all of its gains closed flat right before cash closing. NASDAQ made its ATH three days in a row as Dow fall back another 32 points. It's hard to tell which way the market is going in next few days to a week. The events in next few days could add more sugars to the animal spirits. I still have strong emotional reactions with market ups and downs despite I just reread the summary of "Trading In The Zone".

Made 6 trades today. Couple of SPY and IWM R reversals and one SPY rollover. None of credit spreads were filled. Market may be a little volatile tomorrow during the news conference. I would wait to see. Dow 20000 may come as a surprise.

Net liq lost 11K on RUT 1% pop. I still have 10 ITM and 1 OTM. Available funds are getting low with with some mid week SPX call expiry. I will add more RUT calls to bring it the funds up. It's a constant change since I am still overloaded with position size.

Divergence Continues 1-9-17

NASDAQ made a new ATH while other US major indexes retreated as crude fall over 3%. RUT and SPX gave back 0.72% and 0.34% respectively. It was another welcome relief for me. SPX closed above its recent balance area. So far there is no structure damage to its uptrend. RUT closed near the low of its balance area while in a narrow band. It could break the bottom or pop from here.

Made 7 trades today. I rolled out 2 more RUT ITM calls to lock in some profit and raise strikes. Exited some puts to make room for new puts. I tried to sell put CS but no fills. Will try again if we see another leg down tomorrow.

Profile is more balanced for now. Net liq increased another 10K to 156K while margin ratio is at 49%. I may start to pay back the margin loans from ET slowly. I will add more call hedges before Wednesday.

New Highs With Divergence 1-6-17

Market shacked out the lower NFP numbers after early session's pull back. Dow made a hair away from the magic 20,000. SPX also made a new ATH of 2282. The price actions are still bullish. The B band squeeze for SPX and RUT could push them either way in short term. RUT is the only major stock index fall near half percent today. It may be an indication of divergence since RUT tends to lead the market. However, RUT didn't break yesterday's low. It could turn around with the other indices next week. Admittedly any weakness is a relief for my portfolio.

Made 7 trades today. No any premium collection and rollover was filled in IB. I had to roll the RUT 1370 ATM to Jan 31 1410 since it was hopping around the stick and my time was running out although it ended up OTM. But I followed my plan despite its imperfection and ill timing.

Net liq is up 6K thanks to the 0.5% drop in RUT and IWM. Margin is near 50% after the expiry so I will be fine for next Monday. Too bad that I still couldn't reduce any short calls. It may take longer to reduce any since I roll these ITM short calls further out although upped their strikes.

An unexpected Relief 1-5-17

With yesterday's strong closing I thought there would be a follow through day for indexes, especially RUT to continue the thrust. Instead RUT was under pressure all day. It was down 1.5% before noon and close -1.11% for today. SPX was down 0.6% at one point but recovered most of its losses at closing. SPX has a clear IHS formation. It may be just marking time for the NFP report tomorrow. RUT didn't break any key levels either. It was an inside day within the 1.6% move from yesterday. So the market will go either way tomorrow depending on how it interprets the NFP report or won't even care at all.

Made 7 trades today. Three were RR ratio hedging and one for exit of put. I made three lock and rolls to close some profit and up on strikes. Today's pull back was very helpful. Margin switched to the put side after my risk reversal hedging. So the three rollovers didn't use puts to collect premiums. I learned another tactic for rolling. I have one expiring RUT 1370 ATM to close or roll tomorrow.

Risk profile gets a needed relief from today's price action. Net liq is up 15K to 140K from 125K. Margin ratio is at 82% until tomorrow's expiry. I intentionally held margin on put side to see if it would put me in a better position at least over the weekend.

Bulls Are Back 1-4-17

Yesterday's closing was a bullish indication for today. Bulls seemed not concerned about the releasing of Fed Minutes this afternoon and pushed prices up way before the release. There was no pull back after the release either. RUT and SPX closed up 1.6 and 0.56% respectively. It looks like they are ready to match to the new high after the year end pull back. I need to prepare for the worsening situation. I may have to transfer the 5K back from Etrade.

Made 9 trades today. Most them were ratio hedging and put exit. Sold a set RUT Feb 4 1500 bear calls for a client. I may sell one more set in my personal acct tomorrow if a new high is made.

Risk profile got hit hard today. Net liq lost 17.6K and down to 124.7K after the 5K transferred back to ET. Margin ratio is at 52% for now but next week is still in yellow warning line. I have it until Friday to get it covered.

Retesting Range Lows 12-29-16

Indices traded in a small range toward lower end of their current balance area. They couldn't break the range as expected. At the end they erased most of the losses positioning for the last trading day of the year. We may see a push up and close below the high to end this year. I checked the last four years' final day trading, 2012 and 13 were up and 2104, 15 were down sharply. So tomorrow may be a 50/50 toss. I need to prepare and keep calm for either direction.

Made 2 trades today. Both were rolling up in IWM and RUT. I tried to buy hedges in both directions and sell SPX bull puts. None of them were filled mainly due to the small ranges. I am still anxious during the day, emotionally up and down with price movement. I need to recognize it and let it go. My focus should be on planing my course of actions on market levels.

Net liq gave back 1.7K after RUT closed on a positive note. Margin ratio is at 55%. I plan to exit RUT 1360 this week expiry which is slightly ITM today. I will wait after 2pm to close it expecting a drop after initial pushing up. I will roll up SPX 2235 which is deep ITM for this week.

The 1st Trading Day Of The Year 1-3-17

Futures gaped up from last night's open. It looked like the market is ready to party from the get go of 2017. ES and RUT both were above 1+% mark during the 1st hr of RTH. Then sellers stepped in following CL's down turn. After hours of struggling buyers took control again pushed indexes out of negative territory. The closing was pretty strong. B bands in daily are in squeeze and MACD started to turn up as well. We may be seeing attempts of making new highs in early January. I need to figure out ways to prepare my accounts for the possibility.

Made 10 trades today. IB acct is on post expiry warning as many of my call hedges will go off by this weekend. Couple of my risk reversal ratio hedges were filled during the down turn. The risk reversal with selling puts made my margin to the put side with exposure fees. Also bought couple of RUT calls for next week. I need to get more hedges in before end of the week as my Excess liquidity is on yellow line for next week. I sold Feb 3, SPX 2360 call spreads for clients to make IC 2.

Risk profile gave back some gains of last week. Net liq lost 5.3K from slightly positive during the afternoon. The closing push up was strong. Margin ratio is down to 24% and it may get worst if we get a follow through tomorrow.