Terrible re the lack of posting. My apologies. These past 3 weeks have been very uneventful in trading, it’s been a constant grind in a very very short BB range which is a terrible environment for butterfly trades after a large up move. Our trades have suffered and we patiently await a pull back. Time is ticking for August (big time!) but it was setup just recently to be able to go past the 21 DTE area I usually close things at. I’m afraid it’ll be a larger loss if we don’t see some sort of decent volatility this week.
Another reason for the lack of posting, I’ve been traveling extensively the last 3 weeks and just forgot to post. We did a road trip from Vienna–>Krakow–>Hannover–>Frankfurt–>Freiburg–>Arona/Como–>Lyon–>Turin. Not quite as large as the summer before but good enough that I think I’ve now see most of Europe in the last 5 years.
Anyways, after the Brexit bottom, the market has been straight up making ATHs and been challenging the Aug/Sept trades we’re in. They were all at about 4% profit during the Brexit event to now be about -4%+ I am still in August surprisingly since I don’t have all that much upside risk and my theta is still positive. Any pullback of 3% or more would get us into break-even territory but I am running out of time (we have about 4-5 days max left) before I have to close. The September trade is quite negative now but can easily pull off a win in any normal PB before first week of Sept. I feel our October entry was great and should make up for the losses in Aug/Sept trades (if any). September upside risks are minimal.
The RUT has been up 34% since the Feb bottom and in that environment, it’s impossible to make any real money with the Rhino structure. It’s been a frustrating year but if we get any pull back of 4% or more in the next 30 days, the Sept and Oct trades will likely put our account profits at 50% for the year and that would be a great result.
I think a pull back is around the corner, but what do I know. Especially in this central banker environment. There’s been a total of 666 rate cuts since 2009 and 4 of the major central banks are easing. There’s loads of money keeping things propped up. What reason are there for a pullback? Well, at least short term, via Cobra
1. VXV to VIX ratio is way to high. All previous occurrences at this level resulted in a PB
2. Smart money/Dumb Money confidence spread is way to large
3. Many of the Sentimenttraders indicators are all way overbought
4. The nasdaq 100 commercial hedgers (smart money) made a
short just now.
5. The VIX is down 6 weeks in a row (only happened once in a decade) and the other times it was down 4 weeks in a row–> the results were not good.
6. The BB bands are similar to right before the Sep 2014 correction and the 2015 Aug correction. Very tight! Explosive moves are more likely.