Uncharted waters are always a signal for mariners to take cautionary measures.
The SPX chart below gives a clear visual of the strength of the current rally; all of the broad indices are now in uncharted waters.
SPX 6 month chart
Yesterday's close at 2349.25 was another record for SPX. On the other hand, the volatility index VIX rose 11% yesterday. Normally the VIX does not rise in a bullish market, but this market does not appear "normal" to me. Seeing the rise in volatility on in this bullish market is indicative that investors are buying large amounts of puts as a hedge to their portfolio in the event of a selloff.
VIX 6 month chart
The combination of such a strong rally, as well as a slight rise in the VIX, do not give me a comfortable feeling about entering a new weekly trade. As I have mentioned before, I would not recommend that subscribers enter a trade that I am not willing to risk my own personal capital on. We got caught by the bulls in last week's weekly trade, and with the added risk of a three-day weekend looming, I feel that the potential reward is not worth the risk on a new weekly trade.
I will keep cash as my position this week, and am not recommending a new trade entry for the SPX Weekly Iron Condor for the February 24 cycle. We have the newly-opened RUT monthly Iron Butterfly for March to manage, and will wait for a better entry environment for a short term trade.
Please be patient, it is early in the year and we have many, many weeks yet to trade the weekly Iron Condor.
We are NOT recommending a new trade entry today, and will look for a better trade entry next week. Remember, "Infinite Patience Yields Immediate Results" (author unknown).
As always, trade carefully and stay keen on your risk management.