Option Investor
Updates

HOW ARE WE DOING

HAVING TROUBLE PRINTING?
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We down to about two weeks to go in the five-week September cycle and things seem to be under control - somewhat - as much as they can be in a fickle market. Let's take a closer look at our positions and see if we can get a good night's sleep (or two).

Position #1 - Our RUT 700/690 bull put spread has a 92.92 point cushion with two weeks to go. Under normal circumstances a 92-point would be pretty damn comfortable. The only news that could conceivably bring down the RUT (and the rest of the market) substantially is if the Fed does not cut rates in the upcoming meeting. Those who think they know believe that the market has already built in the rate cut - and the market would be very disappointed if BernakeEven if that should happen, to get below 700, the RUT would have to come down 11.6% from current levels. Could happen, but not likely.

Position #2 - Our SPX 1375/1360 bull put spread is placed right near last month's lows. We have a 103.55 point cushion. Again, it sounds sufficient. I hope this is the last of our 15-point credit spreads. I plan to do my best to avoid these 15-point wide spreads in the future, using 10-point spreads in the future on our SPX trades. If volatility stays elevated, we should be able to come up with some decent 10-point trades.

Position #3 - Our RUT Iron Condor looks pretty good as well, especially the 670/660 bull put spread. That has a sweet 122.92 cushion. The 840/850 bear call spread has a 47.08-point cushion. That's about 24 points above its 52-week high. Is it safe? Well, in the past, most of our problems have come on the topside - and we've had some big up days. We'll keep an eye on it.

Tomorrow we get a jobs number. Those have been known to move the market. There are mixed opinions as to how the market will interpret the numbers. Some are rooting for a weak number while others want a strong number. Bottom line is that market will do what it will do - and probably bounce around a bit during early indecisiveness.

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Emails

I received a number of calls and emails regarding the Siamese Condor discussion in Sunday's column. Some CPTIers even put on the position. Keep in mind that I specifically said that these market conditions are not the best for this strategy. As I said Sunday, we'll keep monitoring the position.

New Positions

Let's see how the market reacts to the jobs number. Perhaps we'll look for our first October position tomorrow.

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S&P 500 Support & Resistance Levels: Closed at 1478.55
Resistance:
1488 is the July 2006/March 2007 up trendline
The 50 day SMA at 1487
1490.72 is the early June closing low and early August peak.
1534 is the early July high
1539 is the mid-June intraday high
1541 is the early June high.
1553 intraday high from March 2000 is the all-time index peak

Support:
The 50 day EMA at 1477
1475 from peaks in December 1999 and January 2000
1461.57 is the February 2007 high.
The 200 day SMA at 1459
1440 is the mid-January high
1427 represents some interim peaks from December 2006 and the early August low
1406 - 1407 from March 2007 and November 2006 interim peaks
1389 from October 2006 interim peak
1375 - 70 from March 2007 low
1370 is the August intraday low

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SEMINAR DATE - Countdown To Charlotte

Charlotte (Sept. 22nd & 23rd)

Don't wait to make your reservation. The seats go quickly.

There is one "retake" spot remaining for the Charlotte seminar. These retake spots are free for those who have paid to attend one of my previous seminars and who want to retake the seminar a second time. They're reserved on a first come first serve basis.

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CURRENT SEPTEMBER CPTI PORTFOLIO POSITION
CPTI September Position #1 - RUT - Bull Put Spread - 792.92

On 7/24, with the RUT at 822.70, we sold 20 September RUT 700 puts and bought 20 September RUT 690 puts for a credit of $.70 ($1,400). Total net credit and profit potential (so far) of about $.70 ($1.40). Our maintenance is $20,000. We'll look for opportunities to complete our Iron Condor if/when the market pops up.

CPTI September Position #2 - SPX - Bull Put Spread - 1478.55
On 8/3, with the SPX at about 1463, we sold 20 September SPX 1260 puts and bought 20 September 1250 puts for a credit of $.50 ($1,000). Our maintenance is $20,000. We'll look for opportunities to complete the Iron Condor if/when the market bounces.

CPTI September Position #3 - RUT - Iron Condor - 792.92

(Formerly August Position) On 6/29, with the RUT at 844, we sold 20 August RUT 740 puts and then bought 20 August RUT 730 puts for a credit of $.45 ($900). Total net credit and profit potential of about $.45 ($900).

Adjustment: On 7/26, we closed the original 20-contract bull put spread position and established a 30-contract Iron Condor consisting of the 670/660 bull put spread and the 840/850 bear call spread. Maintenance is now $30,000 and the new maximum profit range is 670 to 840. The profit potential of $900 remains the same.

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ONGOING STRATEGY - THE ZERO-PLUS Strategy
In the past, I outlined a strategy based on an initial investment of $100,000. At that time, $74,000 was spent on zero coupon bonds maturing in about seven years at a value of $100,000. The principal $100,000 investment is guaranteed. We're trading the remaining $26,000 to generate a "risk free" return on the original investment. We are not compounding our profits by dramatically increasing the number of contracts we trade. With the July profits, our new cash total is $55,060 ($52,210 + $2,850).

ZERO PLUS POSITION -

RUT - New Position To Be Announced Soon

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CPTI SEMINAR SCHEDULE!

SEPTEMBER 22nd & 23rd - CHARLOTTE, NC


Take your trading from a "hobby" to a profitable "business." You need the information you'll learn at my CPTI seminar. You'll learn more than the "how to's" of trading our strategies. You'll learn a new lifestyle - one that can last a lifetime.

DO YOU HAVE PROFIT-ABILITY?
It's always a challenge (and a pleasure) for me to have a roomful of bright people who have a passion for, and are excited about, learning. We go over everything imaginable - from the non-directional strategies to the psychology of trading. We cover a lot more than the mechanics. Inquiring minds want to know the whens and the whys -- not just the hows. That way, they're prepared for the best (and the worst) - and know the best way to handle either situation. Contact me and I'll personally call you with all the details.

If you're a SERIOUS options trader, you want to learn the nuances of our advanced non-directional trading strategies and hone your trading skills. Contact me ASAP at mparnos@optioninvestor.com. Send me your phone number. I'll personally call you with all the pertinent information. The price is a bargain - ONLY $995.00 -- less than the profit from one Iron Condor trade. Take advantage of the "early bird special" and save $100. You'll have a two-day experience that you'll remember, and profit from, for a lifetime. I limit my CPTI seminars to ONLY 25 ATTENDEES. And, as a bonus, if you attend one of my CPTI seminars, you are entitled to RETAKE the seminar a SECOND TIME at NO CHARGE!

52 OUT OF 57 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
USE OUR CPTI WEALTH-BUILDING TECHNIQUES!

You should definitely attend one of my seminars. With what you learn, you'll see a substantial increase in your trading results. Contact me at: mparnos@optioninvestor.com. If you've already signed up, I'll see you there. If you haven't signed up, what are you waiting for?

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HAPPY TRADING!
Remember the CPTI credo: Our remote batteries and self-discipline should last forever, but mierde happens. Be prepared! In trading, as in life, it's not the cards we're dealt. It's how we play them.
MIKE PARNOS, Your Options Therapist and CPTI Master Strategist

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Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.

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