Rally pauses, but weekly gains for the third straight week in a row.
Last week's rally paused on Friday, but the broad market managed to attain new highs, as well as weekly gains for the third week in a row. The benchmark index SPX closed at 2161.74, down -2.01 points or -.09%. Despite Friday's slight decline, SPX managed to post a weekly gain of 1.5%, the third weekly gain in a row.
Below is the open position status:
SPX July 22 Weekly Iron Condor
This position was opened Friday, July 15, as follows:
SOLD SPX July 22 2190 Call, 1.95 credit.
BOUGHT SPX July 22 2200 Call, 1.15 debit.
SOLD SPX July 22 2125 Put, 1.60 credit.
BOUGHT SPX July 22 2115 Put, 1.10 debit.
Order was filled as an "Iron Condor" for $1.30 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: $870.
Target Gain: 7% of margin/risk or $60.
Max loss: 10% of margin/risk or $85.
Below is the risk graph as of the close Friday:
The position is flat delta, a bit above breakeven, so well centered going into next week. Our exit order remains in place to close the position for a debit of $.70 which would be target gain, or for the pre-set max loss of 10%.
SPX July 22 Iron Condor:
Below is the 6 month chart showing the short strikes:
SPX 6 month chart
Next week's economic news is summarized below:
8:30 am Housing Starts
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
8:30 am Philadelphia Manufacturing Index
10:00 am Existing Home Sales
9:45 am Flash Manufacturing PMI
Next week is the planned entry for the RUT August monthly Iron Butterfly. We will look to enter sometime next week, depending on overall market conditions and available credit.
For those unfamiliar with the strategies we trade, the trade management guidelines for all the Couch Potato Trader plays were most recently published on August 20, 2015, and 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,