Pay Day!

Ka Ching! Ring the register folks, I have been welcomed by a visit from my best Iron Condor friend, Mr. Max Profit!

Honestly, the $NDX has performed beautifully for Iron Condors the last 3-4 months, trending flatly. It is here where I become cautious because with May coming soon, it seems people start to bail from their positions in April. You don't want to be in an Iron Condor during a strong trend, like July - November last year. Better to play either a one-sided credit spread, or maybe a directional Option, rolled into a credit spread if things reverse quickly one you.

At this point I would probably wait for this run-up to peak, then buy some OTM Puts for the way down. Hopefully the $VIX will have subsided making the options inexpensive. We'll have to wait and see.

In the meantime, I am going to look for less-risky Iron Condors to trade.

Have a great weekend!

Happy Trading!

Nothing Like a Little Excitement

Nice try.

Well Traders, the $NDX is out to get me. It's one last breath at the O.K. Corral before that gunslinger goes down. Maybe it is a Swan Song, or maybe a last gasp, but in either case, it may be "too little, too late."

Another "Black Tuesday," the second in two weeks. What is it about Tuesdays and crappy markey days anyway? Well, I am down to my last two days, and a $34 point loss on a $240 point down day on the Dow and it looks like I'll be safe. Still, we must always be dilligent and monitor our trades so I won't count my cash just yet. I am still $73 points to the bottom...let's hope we end the week on a high note.

Happy Trading!

T-Minus 3 Days

Well Traders, it looks like we have a WINNER! The $NDX gained $11.68 to end at $1,756.42 for the day. This puts me $106 from my Bull Put and $144 from my Bear Call, and basically puts me IN THE MONEY!

Unless something major happens, I'll log back in Friday with my Max Profit post...and some gloating for the weekend!

Happy Trading!

March-ing to Max Profits

"Trades don't make money when you open them, they make money when you close them."

Well Traders, I don't know who came up with that quote, but it is somewhat fitting. Without being too brash, and with still time on the clock, my March Iron Condor seems to be pretty safe at this point. I am $94 points to my bottom Bull Put spread, and $156 points to my upper Bear Call spread. Barring a complete meltdown a la last week, I should be able to let all my contracts expire next Friday morning (and save on commissions) and close the trade for Max Profit!

It has been a pretty sweet run in the $NDX as the index has performed beautifully for me with its neutral flow. This month has had its moments of uncertainty, but I held fast to my rules and my support and resisatance levels and things seemed to have turned out okay.

Soon I will be trying out a new Iron Condor strategy by paper trading it, but I will still keep you advised on how it works, and probably make a few mistakes along the way. All part of the learning process. Anyway, enjoy your Friday and your weekend, and unless something significant happens tomorrow, I'll catch you on the other side of the weekend.

Happy Trading!

A Beautiful Bounce

Well Traders, I LOVE, LOVE, LOVE when things I expect to happen, happen! You'll remember yesterday I mentioned the "Bullish Gravestone Doji" candlestick formation. Well, in order to be confirmed, I needed a gap up and a white candle today. Bada bing, bada zing, if that ain't a thing of beauty!

I feel much better going into the home stretch here. The MACD and STO are showing strength, and the Doji pattern gave my Iron Condor the boost it needed today. I am now $91 points to the bottom and it seems barring another meltdown, my best friend, Max Profit should be paying me a visit. Still plenty of time between now and then, and today could have been a "Dead Cat Bounce," but that being said, I like my chances on this one!

Happy Trading!

Possible Bottom Reached

Well Traders, it looked like it was going to open as a disastrous day. The DOW was down over $117 pre-market and the NASDAQ was down almost $19 at one point. However, by the time the markets opened, the negativity was tempered and we actually traded positive throughout the day. In the end though, the Bears won and the $NDX closed down $13 points ($10 of those points were in the last 35 minutes of the day) to close at $1,712.94. I am now only $62 points to the top of my Bull Put with about 9 days left.

In my favor today is the fact that we have a "Gravestone Doji" candlestick pattern, which could be a HUGE relief to me if the index pops a bounce tomorrow. A Gravestone Doji can be a Bullish Reversal Pattern meaning the index will bounce from here and help my trade out. I also have the 200DMA helping as support as well as the MACD and STO very low in their cycle. All these indicators may help me and point to some positive movement in the $NDX over the next few days. I could use some positive momentum about now!

I am also staying out of these Low Reward/High Risk Iron Condors for a bit while I learn a new, and better Iron Condor Trading Technique. The new one will give me a MUCH better Reward/Risk factor (and we are all about Risk Management), and allow me to "Leg In" to my trades. Once I learn more, I'll let you know how I am setting them up.

Happy Trading!

Speed Bump Passed

Well Traders, the 'support area" has been breached. I mentioned yesterday that it would have either been a safety net, or speed bump and at the beginning, it looked like the former. However, as the day wore on and folks didn't want to be short over the weekend they sold off and dropped the $NDX over $27 points to end at $1,726.03. I am now $75 points to the top of my Bull Put and yes, I am a little nervous. I have some free days over the weekend to burn off some time value and the STO and MACD are getting oversold so there may be a pullback. I also have two more support areas that hopefully will hold out for just a few more days and bring a visit from my friend, Max Profit.

I have marked the 200DMA as my Next Support, and a previous support at $1,684 as my Last Support which is really my last line of defense before the trade goes sour. I also have the Channel Median Line as an ally and hopefully that can slow any further precipitous fall of the $NDX.

Should be an exciting and nerve-wracking 2 weeks! Stay tuned!

Happy Trading!

Safety Net or Speed Bump?!?!

Well Traders, what a NUTTY day today. Actually, the last three days. Today, the $NDX started down over $35 points bottoming out at $1,717 in the early morning before making a tremendous comeback, going positive for a short while before falling back to close down $8 at $1,753.45.

So what does this all mean? Well, for one, my "support area" highlighted in gray, though pierced three times, has not closed below yet. That's great for my trade; my identified support is acting just like that, supporting the trade from falling through. So while it has acted like a safety net for now, it may be just a speed bump slowing the index from its eventual fall. How long this may last I am not sure, but at over $100 points to the bottom, and the market craziness seeming to abate, it looks like I may yet again close with some solid returns. We'll just have to wait and see.

The MACD and STO are now getting to a point that they should begin to bottom out around here and head up again, which would basically wrap up anothger successful Iron Condor. It may also give me an opportunity to "leg in" to my April trade. What I mean by that, is let the $NDX climb to a peak, then buy my Bear Call which may be a little more expensive, then wait for the index to fall and bottom, then close the Condor by buying the Bull Put. Basically I am entering the Iron Condor at two separate times then simultaneously. That should be a little more lucrative.

Happy Trading!

Another Black Tuesday?

Well Traders, what is it about Tuesday's and bad stock days? You must have been on planet Mars if you didn't hear about the MASSIVE sell off today in the markets. The DOW went plunging over 540 points at one point shaking up more than a few investors I am sure.

What about the $NDX? Well, the index dropped over $74 points to end at $1,756.27. Looking at the chart you'll see where it stopped...right at previous strong support. Coincidence? I don't know, but we'll see how strong that support REALLY is now, won't we? Here's the chart:
As brutal as this day was to the markets, it was just "eh," to my Iron Condor. I am now practically dead center of my trading range with a little less than 3 weeks to go. Truth be told though, I can't last through a few more days of $74 point drops. A correction was imminent, and this may be the start of it, but let's hope it doesn't really get going until after the 16th!

De-fense! De-fense! De-fense!

Happy Trading!

Testing Support?

Well Traders, my anticipated drop in the $NDX is starting to occur. Today the index was down over $15 points at one point, but closed down $9 at $1,830.59. The MACD and STO are definitely showing weakness as I predicted last week.

Today, the index did test support at $1,820 and held. This may have been a temporary thing as I see the index passing below this point on this downturn. Still, one must always be mindful of what the chart is telling us. Right now it is telling me to watch this support level.

The trade has less than 3 weeks left, so Time Value should start to burn off much quicker as March 16th approaches.

Happy Trading!

A New Friend

Well Traders, another day, another small move on the $NDX. Today the index finished up $7.21 to end at $1,846.34. The $NDX hit $1,850 at one point but fell back during the day. We also finished with a "Bearish Long Legged Doji" which may bode well for my trade. It may signal the top of this recent trend, and with the MACD and STO so high right now, I expect the $NDX to start to fall off tomorrow. Let's hope it heads back to my preferred $1,771 level!

Who is my "New Friend?" Well, I went back to the 5-Year chart and discovered something very interesting, a nice channel the $NDX is trading in right now. I drew the pattern in so I could see where it went and low and behod, it gives me wonderful resistance below my Bear Call spread. I have marked it in BLUE on both charts, but here is the 5-Year so you can see it for yourself.That is pretty convincing stuff. Now, that does NOT mean the index can't break that trend, it just means I have a new ally to help the March Iron Condor.

Happy Trading!

Nearing $1,848 Resistance

Well Traders, it looks like the $NDX is gonna make a run at $1,848 before it decides what to do. I suspect, based on the MACD and STO, that it may get there, then fall back down to support, either at $1,820 (previous resistance), or way down toward the $1,771. If it does fall back down to the $1,771 area, then I would feel pretty comfortable about the trade. At this point though, I am hoping the index does not break through this $1,848 resistance level because then I am really have to be on my toes ready to make a roll or two to protect the trade.

The "White Closing Marubozu" on Wednesday should be a bullish indicator for Thursday.

Let's see how things shake out. Happy Trading!

On the Move

Well Traders, the $NDX has been a cheeky little bugger today. The index rose $12.22 to end the day at $1,833.71. It seems the news at Amazon (AMZN) was good enough to give the $NDX a little push.

So now what? Well, the $1,820 resistance has been breached, so it now becomes support. My next (weak) resistance is at $1,848, which was the high on 1/16. It looks like we may get close to that level, then based on the MACD and STO, fall back down a bit. The March trade lost a bit of ground today, but overall I am still in the plus. I always need to be on the defensive and get ready to move the trade if it gets a little hairy. Until that time though, I am staying the course.

Happy Trading!

Pay Day!

Well Traders, ring the register, it's PAY DAY!! My February Iron Condor was a complete success so today, one of my best friends, Max Profit will pay me a visit! What a GREAT way to start the weekend!

Yesterday the $NDX rose a little over $8 points to end the day at $1,823.41. While this is insignificant for February's play, it may be significant for March's play since that is a break of resistance. We'll have to see if it holds and becomes new support, or if it was just a temporary breach.

I get a FREE day (I LOVE those) on Monday for President's Day since all the markets are closed. In the meantime, we'll see how the March play moves and get ready for April's play. Enjoy your three-day weekend!

Happy Trading!

Testing Resistance

Well Traders, the $NDX got a bug up its butt (as did the rest of the Market) and shot up over 431 points to end the day at about $1,1815. Now, I don't expect a monumental run the next 2 days (well, at least tomorrow and Friday's open) to take me out of February's trade. However, we may be coming up against a pivotal point for March's trade. The $NDX is nearing my $1,820 resistance point and I'll be curious to see if it holds out. To this point, it has acted pretty solid, having only been breached once.

You'll notice that there is a definite consolidation of the price as noted by the "squeezing" of the Bollinger Bands. I was going to note that I would expect some sort of breakout from that pinch yesterday, but today's action kind of confirmed that maybe a breakout was imminent. The STO is also showing some strength but the MACD has been getting smaller recently which just represents the neutral stance of the $NDX recently.

We'll see how this plays out.

Happy Trading!

Final Days for February

Well Traders, Friday's "Bearish Engulfing Pattern," MACD and STO indicators set up today's action pretty well as the anticipated down day occured. Today, the $NDX fell $7.11 points to finish at $1,778 (only $3 from my starting point!). I am only just a few days away from February's expiration and it looks like it was a perfect play for me! There would just have to be an absolute insane run the next few days to spoil my party, which I just don't see happening.

It looks like I have about 2-3 more down days before the next bounce in the "support area" highlighted in gray. Then, we'll see how much the index can run up before being turned back again. I am already looking at April's set up which will occur March 15th. I am hoping this flat trend will continue because I may just play an even tighter spread to see if I can't take advantage of this perfect Iron Condor condition. There is a LOT of time between now and then, so we'll just keep an eye out and monitor the March position for now.

Happy Trading!

Wheeeeeeeee!

Wow. Well Traders, this has been an Iron Condor's WET DREAM! I mean, I couldn't script this any better if I tried, except to have had my spreads at $1,825/$1,850 and $1,750/$1,725. At this pace, that would have made some serious Jack!

Anyway, the $NDX took a nice tumble like I expected, though further and faster than I expected to close down -$25 points to end at $1,785.53. You'll notice the nice "Bearish Engulfing Pattern" which may indicate more downside. I would expect that based on the MACD and STO positions as well. The index has been recently rangebound between $1,820 and $1,750 with the exception of a small pop in mid-January. At this point everything looks golden and next week will be payday on Friday morning for February's contracts. Amen!

On a down note, CyberTrader needs to get their shit together with Penson. I keep getting "Maintenance Call" emails for covered positions which is assanine. If they don't fix the problem ASAP, I'll be taking my business to Think or Swim.

Have a GREAT Weekend and Happy Trading!

FREE Lunch

YAAAAAWN!!! Well Traders, I LOVE days like this. Why? Because it is a FREE Lunch day. I mean a -$0.41 move is basically just giving me my Time Decay for Free, not that I am complaining! =)

Compound this with the STO and MACD positions and a week from tomorrow should be a visit from my BEST friend, Mr. Max Profit.

Happy Trading!

The CSCO Effect

Well Traders, I expected this. Cisco (CSCO) has a pretty big effect on technology, so I knew its earnings were going to affect the $NDX one way or the other. It just so happens that the earnings were good, and the $NDX jumped. Still, if you look at my chart, the effect of the move was minimal for me and the index is still well within my profit range. You'll notice the STO is getting near the Overbought territory and the MACD is moving into its upper range as well. I suspect maybe a few more days of upside before the fall. I still have $1,824 resistance in my favor as well as my Diagonal Resistance line.

At this point, barring any incredible 8 day move, my February Iron Condor looks solid. It is still too early to talk about the March trade, too much time left on the table for that one.

Happy Trading!

March Condor In Play...

Well Traders, I have entered my March Iron Condor today. I debated last week whether or not I should be more aggressive and play a tighter spread but I am not yet comfortable being that risky...I may never be. In this case, my best bet may always be "slow and steady wins the race."

My February play is sitting pretty with only 11 days left. It looks like my buddy Max Profit may be paying me a visit a week from Friday...and he is ALWAYS a welcome friend!

For March, since I sense a bit of neutrality in the index, I played a slightly tighter spread than last time. This play will be worth $4 if it expires in March, which is about 25% better than February's play. As you will see on my chart, I have made the new notations.

For March, I am playing the same 1900/1925 Bear Call, but moved my Bull Put up to 1650/1625 from 1625/1600. A little more risk, but I felt with the way the market has been stagnating, and with some good support levels to protect me, it was worth the risk. We'll see how well I called it over the next few weeks.

Happy Trading!