Consolidation continues before the market decides which way to break out.
The broad market continued to trade in a narrow range, a repeat of the last trading sessions. The benchmark index SPX closed Friday at 2173.60, up 3.54 points or .16%. This week's closing is just shy of last Friday's all-time closing high of 2175.03; although SPX did briefly touch on a new intra-day record high yesterday of 2177.03.
Below is the open position status:
SPX August 5 Weekly Iron Condor
This position was opened Friday, July 29, as follows:
SOLD SPX August 5 2200 Call, 1.55 credit.
BOUGHT SPX August 5 2210 Call, .75 debit.
SOLD SPX August 5 2120 Put, 1.75 credit.
BOUGHT SPX August 5 2110 Put, 1.25 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 +$10 as of the close; quite negative delta so should benefit from a pullback early 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 August 5 Iron Condor:
Below is the 6 month chart showing the short strikes:
SPX 6 month chart
Next week's economic news is summarized below:
9:45 am PMI Manufacturing Index
10:00 am ISM Manufacturing Index
10:00 am Construction Spending
8:30 am Personal Income & Outlays
8:15 am ADP Employment Report
9:45 am PMI Services Index
10:00 am ISM Non-Manufacturing Index
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
10:00 am Factory Orders
8:30 am Monthly Employment Situation Report
8:30 am International Trade
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,