Volatility reigns as investors digest overseas events; the waters are way too dangerous to enter a short term trade today.
The first trading week of 2016 has been a wild ride, to say the least. The week began with a sharp selloff on Monday due to news from China, causing us to be stopped out of our first SPX weekly Iron Condor this year.
The intra-day swings have continued all week; the ranges are below:
Monday 49 points
Tuesday 18 points
Wednesday 32 points
Thursday 47 points
The 6 month chart shown below is not a pretty picture:
SPX 6 month chart
The volatility index VIX jumped this week, The close yesterday at 24.99 is above the historical average of 20.
VIX 6 month chart
Future are up slightly this morning. In a few hours, at 8:30, is the monthly non farms payroll report; normally a market mover and the reports are expected to be good. However, I am remaining on the cautious side and not willing to risk my live capital on a non-directional, short term trade such as the weekly Iron Condor. There will not be a recommended trade entry for the SPX weekly Iron Condor today.
I'll quote once again the proverb (unknown source): " Infinite wisdom yields immediate results".
We recommending keeping cash as our position going into next week; with any cooperation from the market we can look at entering the weekly trade next Friday.
For those unfamiliar with the strategy, the trade management guidelines for all Couch Potato Trader strategies were updated on August 20, 2015,and can be found here:
Link to Articles
As always, stay keen on your risk management and trade carefully,