After another choppy week, investors appear to be more convinced the Fed will move forward with a rate hike in September.

Friday's non-farms payroll report showed no surprises, the US gained 215,000 jobs in July and the unemployment rate remained the same at 5.3%. No surprises in this report doesn't increase the likelihood of a rate hike, but it also doesn't decrease the likelihood.

Indices across the board posted losses yesterday. SPX closed at 2077, down 6 points or .27%. This resulted in a weekly loss of -1.3%.

Below is the current open position status:

SPX Weekly Iron Condor

This weekly position was entered Friday; position details below:

- SOLD SPX August 2 2120 Call, .75 Credit.

- BOUGHT SPX August 2 2130 Call, .35 Debit.

- SOLD SPX August 2 2040 Put, 4.00 Credit.

- BOUGHT SPX August 2 2030 Put, 2.80.

Order was filled as an "Iron Condor" for $1.60 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: $840.

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

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

The risk graph showing the position as of the close is below:

SPX August 2 Weekly Iron Condor

As of the close, the debit to exit the position is $1.40, so the position is +$20.

Our "good to cancel" exit order remains in place to close the position when the debit reaches $1.00, which would be target gain. The position will be closed at target gain, or if the pre-set max loss of 10% is reached.

Below is the 6 month chart showing the short strikes:

SPX 6 month chart

A recap of next week's economic news is below:


8:30 am Productivity and Costs


10:30 am EIA Petroleum Status Report


8:30 am Jobless Claims

8:30 am Retail Sales

8:30 am Import & Export Prices

10:00 am Business Inventories


8:30 am Producer Price Index

9:15 am Industrial Producction

10:00 am Consumer Sentiment

New Trade Entry:

Next week is the planned entry for the SPY Iron Condor for the September 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 are below:

- Entry: Approximately 39 days to expiration.

- Wait at least the first hour after open before entering.

- If SPY has moved one standard deviation in either direction, do not enter the trade until SPY settles to less than a one standard deviation move. - Sell a short strike with a delta in the .15 - .20 range.

- Buy a long strike 5 points away from the short strike.

- Minimum credit (for both sides) should be at least .80, or it is not recommended to enter the position.

Trade management:

- Target gain is 10% of the actual margin/risk. This is calculated by the width of the wings (5 point in this case = $500), less the actual credit received. For a one-contract trade using the minimum credit of $.80, the margin/risk is $420. Target gain in this example is $42.

- Max loss is 15% of the margin, or $63 using this same example.

- This position will be traded as a "no touch"; it will remain open as long as SPY remains between the short strikes, until the garget gain is reached. The position will be exited at either short strike or the pre-set 15% max loss.

Trade updates will be posted as appropriate.

As always, stay keen on your risk management and trade carefully,

Dot Hazlin