Month: March 2015

Mar 9 – Trade Plan

Update:

Premarket : TLT is up to 124.7 from its low of 122.97 on Friday and its close of 123.3.  SPY is up to 207.88 from it’s low of 207.1 on Friday and its close of 207.5.  That should bode well for the closing of the SPY/TLT trade.

 

Wow, what a day on Friday, every thing was down, even our hedges!  Literally, the only thing that did well in my portfolio was the MIC. I lost on the EU, CAD, TLT, and equities. I am posting a blog from Urban Carmel who is probably who I respect the most as a technician. Check it out, it’s a very well-balanced technical look at the current market situation.

http://fat-pitch.blogspot.com/2015/03/weekly-market-summary.html?spref=tw

 

The official SPY/TLT trade at SO is down 40%. Mine is down about 19%. I will remove most if not all on any bounce. I don’t expect downside past the 50 DMA at ~206.5 without a bounce first. I have maybe 16% of the trade left on and the portions left on SPY are mostly OTM but inflated because of volatility. I’ll be monitoring and removing pieces as we go through this week. I am hoping to get out at -10 to -12%. I have 196/191s, 205/200s, 206/201s and small amounts of 207.5/202.5s in SPY and I have 126/121 127/122 in TLT.   I’ll remove the  trade in entirety if SPY falls below 206 and if TLT falls below 122.8.  Those are my cut-offs.

 

Mar 4 – Trade Plan

So far for the April MIC I have about 17 units on. I’d like to get it up to about 30 for the month.  I’ll probably add two more tranches on down days to take advantage of the increased volatility.

170 1140/1120 put credit spreads

45 1110/1090  put credit spreads

26 1120/1100  put credit spreads

19 1100/1080 put Credit Spreads

85 1300/1320 call Credit Spreads

5 1230/1220 debit spreads

4 1220/1210 debit spreads

3 1210/1190 debit spread

1 1210/1200 debit spread

I need to put on another 4 debit spreads to get the trade setup properly.

Futures are down quite a bit as of writing this. TLT is slightly up. I’d like to get out of this pair trade for good.  It’s down about 9% right now.

Mar 3 – Trade Plan

TLT has fallen about 2% yesterday from its Friday close sitting at 126.89 from a close of 129.5 on Friday. We closed most of the TLT portion of the SPY/TLT trade on Friday during the rise and we’re left with about 25% of the TLT portion. Not a great day for TLT but the SPY portion made up for some of the loss on the TLT.  I gather we should still be able to get out of this thing at break-even or slightly below. We’ll see.  TLT has about a 30% chance of double-bottoming at 126. Markets are getting over bought on many indicators so we may see a bit of strength in TLT as we start to stall in the markets and as participants start to accumulate TLT as they usually do during these prolonged topping or perceived topping patterns. After consecutive ups, SPY may spend a few weeks in a range.  During this phase, TLT generally does go up because more and more people start to expect a pullback (during bull markets) buying bonds to hedge an expected pullback is a better way than to short SPY directly.  Going to give what’s left of the trade a bit more time. SO hasn’t closed their trade either (100% of it). I’ve closed 70% of it.

I closed most of my MIC from February. It did well. Happy with it and the new parameters.

The MIC for March is doing well. RUT isn’t really moving all that much which is great for the trade. No adjustments required. I did enter a small amount of call spreads at 1243 yesterday and added the corresponding put spreads after it fell a bit at about 1237. As well, when it rebounded to 1242 I put on the debit spreads.  When I leg in I do it with very tight stops and only small portions. If RUT proceeded to 1246 I’d have immediately added the put spreads.