After Thursday's sharp decline, the resilient market clawed its way back into positive territory.

Thursday spooked the market over rising tensions between the US and North Korea, causing a sharp selloff. But the broad market managed to recover and climb back into positive territory to end the week. The benchmark index SPX closed up 3.11 points, 0.1%, at 2441.32. The index posted a loss for the week of -1.1%, the largest one-week decline since November.

The volatility index VIX jumped this week with the selloff Thursday; below is the 6 month chart:

VIX 6 month chart

The VIX dropped slightly Friday to close at 15.51, down 3.3%.

Below is the open position status:

SPX Weekly Iron Condor

This position was opened Friday, August 11; details below:

Option Code: SPXW170818

SOLD SPX August 18 2485 Call, 1.30 credit.

BOUGHT SPX August 18 2495 Call, .55 debit.

SOLD SPX August 18 2370 Put, 4.45 credit.

BOUGHT SPX August 18 2360 Put, 3.80 debit.

Order was filled as an "Iron Condor" for $1.40 net credit (all four legs).

Margin/Risk is calculated by the width of the wings ($1,000), less credit received.

Margin/Risk for this week's trade: $860.

Target Gain: 7% of margin/risk or $60.

Max loss: 10% of margin/risk or $85.

Below is the risk graph of the position as of the close Friday:

SPX August 18 Weekly Iron Condor:

Below is the SPX chart showing the short strikes:

SPX 6 month chart

Think or Swim is currently showing the position +$50, the current debit to exit is $.90. Our orders remain in to close for $.80 which would be target gain, or if the max loss reaches 10%.

Trade Management:

The guidelines call for the position to remain open until target gain is reached, as long as SPX stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPX reaches either short strike. It is recommended to have "good to cancel" order in for both target gain and max loss. The setup of conditional orders can vary by broker, so please check with your broker if you are unfamiliar with conditional orders on your trading platform. It is, however, recommended to exit the position prior to the release of the FOMC minutes Wednesday afternoon. While there should not be any surprises in the minutes, there is sometimes volatility that could go against the position with little time to recover.

SPY Monthly Iron Condor for September:

This position was opened on Monday, August 7; details below:

- SOLD SPY September 252 Call, .53 credit.

- BOUGHT SPY September 257 Call, .08 debit.

- SOLD SPY September 238 Put, .97 credit.

- BOUGHT SPY September 233 Put, .62 debit.

Order was filled as an "Iron Condor" for $.80 net credit (all four legs) .

Margin/Risk is calculated by the width of the wings ($500), less credit received.

Margin/Risk for this trade: $420.

Target Gain: 10% of margin/risk.

Max loss: 15% of margin/risk.

Below is the risk graph of the position as of the close Friday:

SPY September Iron Condor:

Think or Swim is currently showing the position down -$10, but the position is fairly well centered and we will let it work.

Below is the SPY chart showing the short strikes:

SPY 6 month chart

Trade Management:

The guidelines call for the position to remain open until target gain is reached, as long as SPY stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPY reaches either short strike. It is recommended to have a "good to cancel" conditional order in to exit the position for target gain or max loss. Please follow your broker's specific guidelines on the setup of conditional orders as they can vary by broker.

Next week's economic news, is summarized below:

Sunday

10:00 pm China Industrial Production Report

Tuesday

8:30 am Retail Sales

8:30 am Empire State Manufacturing Index

8:30 am Import/Export Prices

10:00 am Housing Market Index

Wednesday

8:30 am Housing Starts

10:30 am EIA Petroleum Status Report

2:00 pm FOMC Minutes

Thursday

8:30 am Jobless Claims

8:30 am Philadelphia Fed Business Outlook Survey

9:15 am Industrial Production

1:00 pm Fed's Robert Kaplan speaks

1:45 pm Fed's Neel Kashkari speaks

Friday

10:00 am Consumer Sentiment

10:15 am Fed's Robert Kaplan speaks

Next week is the planned entry for the RUT September Iron Butterfly. We will look to open the position early in the week, depending on market conditions and available credit.

For those unfamiliar with the strategies we trade, the trade management guidelines for all the Couch Potato Trader plays 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,

Dot Hazlin