The bulls have taken SPX outside the entry range for an April 1 weekly trade.
As outlined in the guidelines for the weekly credit spread trade, it is recommended NOT to enter a new position if SPX moves over a one-day standard deviation. The current one-day standard deviation is 13 points. As of this writing, SPX is +16 points, so I will not be entering a new position today.
With such a move, there could very likely be some "filling in" of the gap; and I do not want to get caught on the wrong side of the market with such a short term trade. I will keep cash as my position for this cycle, and look forward to the April 2 trade entry next week.
For those unfamiliar with this trade, the guidelines were published on May 12, 2013. The article can be found here: Link to Articles
It's never an easy decision for me to not enter a new weekly trade. In my opinion, it is more important to practice keen risk management. I personally feel the market is too volatile today to risk the capital for the weekend. I would rather practice patience than chase the market up with a move like today just to enter a position.
With the end of the month and the end of the quarter at hand, investors are likely to key in on economic data scheduled to be released over the next week:
9:45 am Chicago PMI
9:55 am Federal Reserve Chair Janet Yellen speech to community reinvestment conference in Chicago.
10:30 am Dallas Fed Manufacturing Survey
9:45 am PMI Manufacturing Index
10:00 am ISM Manufacturing Index
10:00 am Construction Spending
8:15 am ADP Employment Report
10:00 am Factory Orders
10:30 am EIA Petroleum Status Report
8:30 am International Trade
8:30 am Weekly Jobless Claims
10:00 am ISM Non-Manufacturing Index
8:30 am: Monthly Employment Situation
The most market-moving event of the week is likely to be Friday's release of the Non-Farms Payroll. Because this news can create so much volatility, the next weekly trade entry date will be on Friday, after the release and the market has settled.
Looking ahead to the next monthly trade, the planned entry for the SPY Iron Condor will be around April 7, which is 39 days prior to the May expiration cycle.
I will post an update mid-week as I see how the market is reacting to the barrage of news.
As always, stay keen on your risk management and trade carefully,