Will the FOMC meeting announcement bring fireworks today?
Today is a busy day for economic reports including ADP Employment, GDP, and the FOMC announcement at the conclusion of their meeting at 2 pm. There is usually volatility surrounding the FOMC announcement regardless of what they announce. There is no post-meeting press conference, and no surprises expected. However, time will tell how this may affect the May SPY Iron Condor position.
The position as of the close yesterday is shown below:
SPY May Iron Condor
The position is slightly positive, although now very close to the short call strike of 190. If the market reacts favorably to today's news, SPY could rally to challenge the all-time high of 189.70 reached on April 4. The position will remain open for now; the plan is to exit if the short strike is reached. The SPY six month chart is shown below with the short call strike indicated.
SPY 6 month chart
For those of you who trade or follow the weekly SPX Credit Spread, our position was stopped out on Monday at the low of the day. Monday's 26+ range from the high to the low of the day was the classic "whipsaw". In hindsight, if I did not have an automated exit order in place, the position would have returned to positive territory by the end of the day. However, SPX could have just as easily continued down, so I still recommend having OCO's in place for target gain and the pre-set max loss.
The next possible entry date for a new weekly credit spread will be on Friday of this week. The monthly Non Farms Payroll report will be released prior to the open, and this event is usually a market mover. I will evaluate market conditions on Friday and plan entry according to the guidelines.
Trade updates will be posted as appropriate.
Stay keen on your risk management and trade carefully,