Plan for SPX Weekly Credit Spread for February 2 cycle
As of this writing, it appears the market is reacting in a positive manner to the monthly Non Farms Payroll report released a short while ago at 8:30 est. According to the report summary, the U.S. added 113,000 jobs in January and the unemployment rate fell again to a new post-recession low. However, the pace of hiring appears to have slowed over the past few months. The nationâ€™s unemployment rate dropped to 6.6% from 6.7%.
As of this writing, SPX futures are currently +13 points. Currently a one-day standard deviation is approximately 16 points. The plan for today is to enter a weekly credit spread, however, I will most likely wait until this afternoon before entering the position as I prefer to see how the day settles. If the bullish move takes it beyond a one-day standard deviation, the position will not be opened.
As of the close yesterday, the 20 day EMA is at 1793.46, and SPX closed at 1773.43. This moving average was brought down by the significant move down earlier this week. As of now, I have a bullish bias for the short term, and will likely open a put credit spread later today. I will look to sell a short put with a delta of -15 or less; I am willing to accept a bit less credit to be further away from the price of SPX at the time of entry. It is not recommended to accept less than $.75 credit for the spread.
I will post entry details when the position is opened.
As always, stay keen on your risk management and trade carefully.