Another volatile week ended with a quiet close on Friday, as investors paused after the rally sparked Thursday by the FOMC minutes.
The advances came this week after the Fed minutes showed officials were reluctant to raise interest rates due to global risk concerns.
SPX posted two straight weeks of gains, edging up 1.46 points Friday to close at 2,014.89 for a weekly rally of 3.3%. This represented the largest weekly gain of 2015.
SPX 6 month chart
Last Monday we entered the SPX weekly Iron Condor for the October 2 cycle rather than the previous Friday to eliminate the weekend risk. We were still able to get decent credit for the trade, and closed it on Tuesday for target gain. If the market is within the guidelines, we will once again enter the weekly Iron Condor on Monday. The trade will be for the October monthly cycle, option code SPX151016 which expires on October 16.
VIX 6 month chart
The "fear index", VIX, dropped this week to close at 17.08, now slightly below the historical average of 20. We will hope that this still keeps credits in line for the weekly Iron Condor entry on Monday.
We will continue to trade the plan and keep tight reigns on our risk management. Please don't hesitate to email me anytime with questions you may have.
A recap of next week's economic news is below:
10:30 am Fed Charles Evans speaks
8:00 am Fed James Bullard speaks
8:30 am PPI
8:30 am Retail Sales
10:00 am Business Inventories
2:00 pm Beige Book
8:30 am Jobless Claims
8:30 am Consumer Price Index
8:30 am Empire State Manufacturing Survey
10:00 am Philadelphia Fed Business Outlook
10:30 am Fed William Dudley speaks
11:00 am EIA Petroleum Status Report
9:15 am Industrial Production
10:00 am Consumer Sentiment
New Trade Entry:
Next week is the planned entry for the SPY Iron Condor for the November monthly cycle. Monday will be 39 days to expiration; so we will plan to enter the position sometime next depending on market conditions and available credit.
For those unfamiliar with the trade, the guidelines for all the Couch Potato Trader plays were most recently published August 20, 2015, and can be found here: Link to Articles
Trade updates will be posted as appropriate.
As always, stay keen on your risk management and trade carefully,