7/25/2008 9:15:23 PM
The system remains in Buy mode.
On July 22 we sold a half position in an SPX August 1170(SPTTN)/1160(SPTTL) Put Option Spread for a net credit of $1.00.
On July 25 we sold the other half position in an SPX August 1185(SPTTQ)/1175(SPTTO) Put Option Spread for a net credit of $1.20.
The total premium received averages now to $110 per $1,000 of margin required per spread.
SPX Chart - Bigger Picture
In the bigger picture, we're firmly in downtrend, however support around 1250 is holding it seems the next cycle of this phase is to the upside. The market can rise over 100 points from here and still be in a bear market, so there's decent room to move up from here.
SPX Chart - Shorter Picture
In the shorter term, the market has held 1250 well this week. It overshot on Wednesday by hitting 1291 but settled down which enabled us to complete the Put Spread position we were going for.
For next week the market is likely to jump around between 1250 and 1290 until it sorts out which direction it wants to go. A close above 1290 will be an indication that it's going to the 1320 region. On the other hand if the market closes below 1240 then a retest of 1200 is possible.
From our perspective, we still remain confident that in the near term we're likely to see more positive moves than negative ones.
With our open positions, we have 3 weeks to expiry and remain sound.
For next week, support is 1240 - 1250 and resistance is 1280 - 1290.
The quote this week is from Sir Winston Churchill, "Kites rise highest against the wind - not with it."
Have a great weekend and email me at email@example.com with any questions or comments.