Option Investor
Updates

BYE BYE RALLY

HAVING TROUBLE PRINTING?
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It was nice while it lasted. Maybe the relief rally is taking a rest. After all, a whole positive week can be exhausting. Maybe it's just time to resume the down trend. That?s more likely.

We have about an 85-point cushion for our SPX bull put spread (1170/1160) with about three weeks to go to expiration. A lot will depend on the movement of oil. It came down with a thud, which was a blessing for stocks. Now, it's ready to bounce back, which does not bode well for the market in general.

If oil moves back up and makes a double top, we could see $100/barrel oil at some time in the future, but it probably won't happen during this cycle. Don't hold your breath for that to happen, but market technicians believe it's a possibility.

Our RUT bull put spread (620/610) still has an 82-point cushion, which seems pretty safe at this point. Last month, when the shit hit the fan, it was the RUT that held up better and provided us with some nice profits. Let's hope it will, once again, have that same resilience.

In the back of your mind, note that September is a five month cycle. That means, we have a bit more flexibility if we have to roll out a threatened position.

Can You Believe It?
I can't. July marks my six year anniversary writing my Couch Potato Trader column for OptionInvestor. I wouldn't have thought it possible. It hasn't always been a smooth road (long-time subscribers and seminar grads know what I'm talking about), but our Couch Potato portfolio hasn't suffered - posting stellar results year after year.

Zero-Plus Strategy
Our July bull put spread was 100% profitable and we tacked on another $2,100 of profit to our total. We now have accumulated over $64,000 of profit. Pretty impressive.

I'm going to be looking for a new Zero-Plus position. As the market continues down over the next few days, I'll be scanning the September chains for possibilities. Right now I'm looking at the SPX September 1080/1070 spread for $.60-.70.

On the RUT, I'll be focusing on the September 570/560 or 560/550 bull put spreads for a credit of $.60-$.70. These premiums aren't available quite yet, but they may be if the market continues to move down.

I don?t mind waiting the eight weeks that are left to September expiration for a position that looks particularly safe. I'll let you know if any of those positions get filled. Don't wait for me to announce the position ahead of time. Feel free to use some creativity in selecting your own positions. I know that some of you use the Zero-Plus positions instead of the portfolio position. That's perfectly OK. They might, however, require a little more patience.

Emails
I've received emails and phone calls from some subscribers who missed the last August RUT suggested portfolio position. I want to remind you that it's not necessary to be in the market every single month. Don't compromise and put on positions that may be too close for comfort just to be in the game. The market will be there next month, and the month after.

This volatile market is not especially conducive for range-bound strategies. This is not for everyone. I suggest positions I think have a high probability of success - and, 90% of the time, they work out. Sometimes, when you miss a trade, another opportunity presents itself later to get in - and often for either more premium or at a safer level. But, there are no guarantees that those opportunities will be there.

If you have a problem filling the suggested positions when announced, you might consider having them auto-traded. My broker, Mike Cavanaugh, is set up to auto-trade all my suggested positions. If you'd like his contact information, drop me a note at mparnos@optioninvestor.com.

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S&P 500 Support & Resistance: Closed at 1252.54
Resistance:
1257 is the March low
1270 is the January low
The 50 day EMA at 1307
1317 from the February low
1320 is a 50% retracement of the May to July sell-off
1324 is the April low
1331 is the June low
1345 is an ancient trendline
1370 is the August 2007 intraday low
1374 is the March 2007 closing low
1387 is the April 2008 intraday high
The 200 day SMA at 1390
1396 is the February 2008 peak
1406 is the August and November 2007 closing low

Support:
1244 is an August 2005 peak
1240 to 1221 are September 2005 peaks1234 is the July 2006 low
1224 is the June 2006 low
1176 from the Q4 2005 lows
1167 is the January 2005 low
1154 from the May 2005 lows
1142 is the 2005 closing low

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NEW SEMINAR DATES ANNOUNCED!

After a very special sold out Las Vegas seminar, I?ve put together two new seminar dates along with Early Bird Special dates.

OCTOBER 4 & 5 - DALLAS, TEXAS

DECEMBER 6 & 7 - ORLANDO, FLORIDA

You will save $100 if you complete your reservation for the DALLAS seminar by August 17th. Your two days of education and enlightenment will cost only $895.00.

You will save $100 if you complete your reservation (including payment) for the ORLANDO seminar by October 1st, your two days of education and enlightenment will cost only $895.00.

If you can, plan to stay a third day. Mike Cavanaugh, my esteemed broker, will be giving a comprehensive presentation on the Monday following the two seminars. You are invited to attend - at NO CHARGE. Don't miss it.

Contact me as soon as possible. Send me your phone number (Contact Support) and I'll personally call you to reserve your spot and to answer any questions you may have. Both locations are great vacation destinations. The earlier you get your airline tickets, the cheaper they?ll be.

RETAKES
Seminar grads who want to schedule their free retakes should contact me immediately (mparnos@optioninvestor). There are only five retakes per seminar and are first come first served. They go quickly. He who hesitates stays home.

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CPTI AUGUST POSITION

CPTI July Position #1 - SPX Bull Put Spread - 1252.54

On 6/19, with the SPX at about 1342, we sold 20 SPX August 1170 puts and bought 20 SPX August 1160 puts for a credit of $.65 ($1,300). Maintenance is $20,000. I'll look to put on a bear call spread in the future - IF it makes sense.

CPTI AUGUST Position #2 - RUT Bull Put Spread - 702.39

On 5/23, with the RUT at about 735, we sold 20 RUT July 620 puts and bought 20 RUT July 610 puts for a credit of $.65 ($1,300). Maintenance is $20,000.

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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 May profits, our new cash total is $64,220 ($62,110 $2,100).

JULY ZERO PLUS POSITION - RUT - 702.39

Our 30 contract RUT position expired 100% profitable, yielding a healthy $2,100.

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SHORT & SWEET - RUT - 702.39

On 5/18, we opened a new hypothetical ?Short & Sweet? position, selling 4 December RUT 530 puts and selling 4 RUT 930 calls for a total credit of $10.30. Then, we purchased 4 of the July 550 puts and 4 of the July 890 calls to give us two months (June & July) of protection for $.60. Our net credit, thus far, is $9.70.

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SEMINAR DATES -


DALLAS, TEXAS - October 3, 4 & 5

ORLANDO, FLORIDA - December 6, 7 & 8


62 OUT OF 68 PROFITABLE MONTHS!!
WANT TO ACHIEVE SUCCESS WITHOUT STRESS?
OF COURSE YOU DO!!
LEARN OUR CPTI WEALTH-BUILDING TECHNIQUES!

I?ve negotiated excellent low room rates for both seminars. Check your calendar and contact me as soon as possible. Send me your phone number at ? Contact Support. I will personally call you to go over the details and to answer any questions you may have.

Also attending (and speaking) in Dallas and Orlando will be Mike Cavanaugh, my personal broker and option strategist extraordinaire. Actually, he knows this stuff better than I do. I guarantee you?ll be impressed.

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 will 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!

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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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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