Market Summary
Stocks ran into headwinds midweek as traders could not find a reason to push prices through near-term resistance levels. The Federal Reserve appears to be the lever that is containing prices. Investors for the most part have discounted the current headline financial data such as the ongoing European debt crisis, slowing demand out of Asia and the tepid U.S. economic recovery. Everyone was waiting to see whether the Fed would roll out QE3, when that did not happen traders took the opportunity to cash in profits from stocks price run-up since the beginning of the month. The updated S&P 500 Index P&F chart below confirms a new downtrend off the recent highs (column of O's on the far right). Fed Chairman Ben Bernanke hedged his bet by suggesting the Fed will act in the future if necessary. Mr. Ben's hedging comment may have contained prices from falling further as traders scooped in to buy shares at near-term support (which was the previous resistance level for the past month). Add the question of when or if the Fed will act to the potential fallout from the imminent Supreme Court Healthcare legislation decision, plus the confusion about tax increases and/or budget cuts from Federal, State, and local governments. How all this uncertainty will impact businesses operating results suggest that it is reasonable to expect the stock market to continue to spurt triple-digit daily moves that have become typical at this time of the year.

SPY Position Update
SPY closed at $133.46 on Friday – the June position is approx. $3,000 in the black
SPY is priced ABOVE its current 14-day EMA (see SPY chart down below)
SPY is trading ABOVE its 20-day Bollinger Band SMA (see SPY chart)
SPY is priced BELOW its 50-day simple moving average (see SPY chart)
SPY is ABOVE its 200-day simple moving average (see SPY chart)
Relative Strength Indicator (RSI) is neutral (See SPY chart)
Moving Average Convergence/Divergence (MACD) is neutral (See SPY chart)

The May 15th Couch Potato published a June expiration SPY bull put spread
On June 14th we suggested letting the put spread expire worthless for an approx. $1,200 gain (see tables below)

The June 6th Couch Potato published a June Quarterly end-of-month expiration SPY bear call spread
The call spread is approx. $900 in the black (see tables below)
$136 strike price short call delta is .2200 (78% probability this position will be profitable)

The June 6th Couch Potato published a June Quarterly end-of-month expiration SPY bull put spread
The put spread is approx. $1,000 in the black (see tables below)
$125 strike price short put delta is -.0299 (97% probability this position will be profitable)

SPY Risk Analysis
June Quarterly options expire next week and the risk is the S&P 500 index price turning back up and threatening the $136 strike price short call prior to Friday expiration.

TLT Position Update ---------------------------------------------------------
TLT closed at $126.40 on Friday – the June position closed approx $900 in the black

The May 22nd Couch Potato published a June expiration TLT bear call spread
On June 11th we suggested closing out the call spread for an approx. $900 gain (see tables below)

The June 21st Couch Potato published a July expiration TLT bear call spread (see tables below) .

TLT Risk Analysis
As mentioned above we closed out the June TLT call spread prior to expiration. Now the risk is long-term Treasury bond prices continuing to drop and threatening the July $122 strike price short put (the published call spread was not available as bond prices pulled back the next day).

GLD Position Update ---------------------------------------------------------
GLD closed at $152.64 on Friday – the June position is approx. $1,600 in the black
GLD is priced BELOW its current 14-day EMA (see TLT chart down below)
GLD is trading BELOW its 20-day Bollinger Band SMA (see TLT chart)
GLD is priced BELOW its 50-day simple moving average (see TLT chart)
GLD is well BELOW its 200-day simple moving average (see TLT chart)
Relative Strength Indicator (RSI) is bearish (See TLT chart)
Moving Average Convergence/Divergence (MACD) is bearish (See TLT chart)

The June 13th Couch Potato published a June Quarterly end-of-month expiration GLD bear call spread
The call spread is approx. $900 in the black (see tables below)
$164 strike price short call delta is .0166 (98% probability this position will be profitable)

The June 6th Couch Potato published a June Quarterly end-of-month expiration GLD bull put spread. The put spread is approx. $700 in the black (see tables below)
$148 strike price short put delta is -.1469 (85% probability this position will be profitable)

GLD Risk Analysis
June quarterly options expire next week and the risk is gold prices continuing to drop and threatening the $148 strike price short put prior to expiration on Friday.

Exit Plan
As mentioned above the June quarterly options expire on Friday and we need to closely monitor our SPY and GLD positions. In particular, we should keep a tight reign on the SPY short call and GLD short put positions as they are the most likely to be threatened.

Final Comment
The June 17th Couch Potato Final Comment mentioned "... The S&P 500 Index weekly Heikin-Ashi chart below indicates that stocks may in fact have turned up off the recent correction lows...expect a trend change to range-bound trading. Volatility levels are relatively subdued..." Last weeks one day market crash notwithstanding, the updated S&P 500 Index weekly Heikin-Ashi chart below confirms this analysis is valid. Unless something unexpected happens (Fed intervention) we should expect stocks to gyrate in a trading range.

Happy Trading

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.