Market Summary
All signs are pointing down and after hour futures are headed further south. Now is the time to fold them and live to fight another day.

SPY Position Update
Listed below is the status of our SPY Iron Condor trade as of Tuesday May 18th. This position has been open for 48 days:
The entire position is approx. $4,600 in the red
SPY closed at $112.40
Both the 30-day historical and implied volatility numbers are at the upper levels of their respective 52-week ranges – this is considered bearish
SPY is priced BELOW its current 14-day EMA (see SPY chart down below)
SPY is trading BELOW its 20-day Bollinger Band SMA, and 50-day simple moving average (see SPY chart)
SPY is still ABOVE its 200-day simple moving average (see SPY chart)
Relative Strength Indicator (RSI) is bearish (See SPY chart)
Moving Average Convergence/Divergence (MACD) is bearish (See SPY chart)

SPY Bear Call Spread
The April 29th Couch Potato recommended closing out the initial call spread for an approx. $200 loss and following up with a TRADE ADJUSTMENT to roll up the call spread to a higher strike price (see tables below)

The Bear Call adjustment is approx. $900 in the black and should (see tables below)
Our $124 strike price short call delta is .0010 (99% probability this option will be profitable at expiration on Friday)

SPY Bull Put Spread
The April 29th Couch Potato recommended closing out the original put spread for an approx. $880 gain and following up with a TRADE ADJUSTMENT to roll up to a higher strike price put spread (see tables below)

We are closing out the entire adjusted put spread for an approx. $5,300 loss (see tables below)

SPY Risk Analysis
We are closing out the short put and the short call spread is so far out of the money that there is little risk in letting in letting it expire worthless on Friday.

DIA Position Update
Listed below is the status of our DIA Iron Condor trade as of Tuesday May 18th. This position has been open for 33 days:
The entire position is approx. $2,700 in the red
DIA closed at $105.39
Both the 30-day historical and implied volatility numbers are at the upper levels of their respective 52-week ranges – this is considered bearish
DIA is priced a BELOW its current 14-day EMA (see DIA chart down below)
DIA is trading BELOW its 20-day Bollinger Band SMA and 50-day simple moving average (see DIA chart)
DIA is still ABOVE its 200-day simple moving average (see DIA chart)
Relative Strength Indicator (RSI) is bearish (See DIA chart)
Moving Average Convergence/Divergence (MACD) bearish (See DIA chart)

DIA Bear Call Spread
This spread is approx. $970 in the black (see tables below)
$114 strike price short call delta is .012 (99% probability this option will be profitable at expiration on Friday)

DIA Bull Put Spread
We are immediately closing out the entire put spread for an approx. $3,700 loss (see tables below)

DIA Risk Analysis
Similar to the SPY Risk analysis above we are closing out the short put; the short call spread is so far out of the money that there is little risk in letting in letting it expire worthless on Friday.

Exit Plan
As mentioned above we closing out all the put spreads and plan on letting the call spreads expire worthless.

Final Comment
Right now downside volatility makes it extremely challenging to do market neutral trades. The key for us is to minimize losses and preserve capital until the environment is more conducive for our trading strategy.

Gregory Clay

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.