Interesting advice. Sentiment sometimes can be more powerful than actual data. One question for you though -- any reason why you use the wrong quote character? In your posts I see that you regularly use the backquote character (`) instead of the correct apostrophe character ('). It's somewhat distracting, particularly in this post.
I've also seen the 200SMA holding. THat is why I opened my position today. I got a bit nervous when we dropped through it fast though. AS far as the FLY conversion, I'm just not seeing a continued increase in vols. I'm expecting a bounce in the underlying the next couple days accompanied by a drop in vols. I think that it might provide me with a good entry on the FLY conversion. I'm not set on it yet though. I've considered only converting 1/2 while offsetting the other 1/2.
cache, you've been around for a while, whats your opinion for the SPX (market) over the next 3-4 months? Just curious
I have a GTC order to sell 400 SPX JUN 1165/1175 Put Spreads @ $0.50. If filled: Risk = $380,000 Credit = $20,000 Return = 5.26% Will let you know if I get filled. CLOSED POSITIONS MAY POSITIONS -500 SPX MAY 1215/1225/1370/1380 Iron Condors @ $0.60 Credit = $30,000 Risk = $470,000 Return = 6.38% VIX CALL HEDGES Long 100 VIX MAY 20.00 Calls @ $0.20 Cost = $2,000 Long 50 VIX MAY 15.0 Calls @ $0.62 Cost = $3,100 DIAGONAL SPREADS Sold - 24 MAY 1345 Calls @ $1.50 ($3,600) Bought +30 JUN 1385 Calls @ $1.05 $3,150 Net Credit = $450 TOTAL Net SPX credit {minus hedges and commish approx} = $22,400 Diagonals still has JUNs open + $450 Credit
Obviously from my trade today I don't feel that we'll go lower than 1245 during the next few weeks. I think it will take another 0.3% core CPI number and/or a confirmation that rate hikes will increase to break below that level. OTOH, May generally kicks off the bearish season on thinner volume. Moves in either direction will be exaggerated especially if made on high volume. I opened the position today intending to capitalize on a bounce, which is why my short is positioned fairly close. My overall opinion for the next month is flat, in a range between 1250-1280 (which is why I'm considering the FLY conversion). Then, June 14 the market decides which direction to go. For a number of reasons I consider 1245 a VERY critical support. Then hurricane season, filled with wild energy swings to which the market cannot react correctly. If the Fed stop hiking rates, energy prices take center stage. Reports are suggesting a mild summer compared to last year. I think they are full of it. Truth is, they don't know at all. But the fact of the matter is that we still haven't recovered from Katrina. Any whispers of a hurricane heading toward the gulf are not good. Bullish trades are best placed on consumer non-cyclicals and health care, while bearich trades are best placed on transportation and tech. JMO in a nutshell. But then, what do I know. I'm just some guy. The fact that I was bold enough to say anything means that the opposite will be true. Summer forecasts are much more difficult than winter.
I was just thinking to myself while going over the charts that the only really safe level for the next couple months is below the 1180 support. I had to chuckle when I looked at your post and realised that I wasn't the only one thinking it.
The attached file plots the VIX over the last couple years. Included on the chart is some commentary from one of the professional analysts that I follow. Interesting how the VIX levels have changed over the last couple of years.
thanks RD I don't think I've seen a long term chart of the vix (2+) yrs...in retrospect its easy to see why fotm worked so well in 05...vix was really quite contained and although "they" don't recommend selling premium during low vix periods fotm CS's are certainly fairly good to do.