The market continues in a consolidation mode; a breakout in either direction could occur at any time.
The broad market continued to creep higher Friday after a positive jobs report, higher than the 199,000 expected. The US added 211,000 new jobs in April, and the unemployment rate dropped to 4.4%.
This past week represented the quietist 8-day stretch since 1952, as volatility continued to drift lower. The "fear index" VIX closed at 10.57, after dipping to a low for the day of 9.99.
The benchmark index SPX closed up 9.77 points at 2399.29, or +.41%. This close was just slightly below the intra-day record high of 2400.98 reached on March 1, 2017.
Below is the open position status:
SPX Weekly Iron Condor
SOLD SPX May 12 2420 Call, 1.20 credit.
BOUGHT SPX May 12 2430 Call, .50 debit.
SOLD SPX May 12 2350 Put, 2.75 credit.
BOUGHT SPX May 12 2340 Put, 2.20 debit.
Order was filled as an "Iron Condor" for $1.25 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: $875.
Target Gain: 7% of margin/risk or $60.
Max loss: 10% of margin/risk or $85.
Below is the risk graph as of the close Friday:
SPX May 12 Iron Condor:
TOS is showing the position down by ($-40) as of the close, very short delta so should benefit from a pullback early next week. Our order remains in place to exit for target gain when the debit reaches $.65, or if the max loss reaches 10%.
Below is the SPX chart indicating the short strikes:
SPX 6 month chart
Next week's economic news, is summarized below:
All Day French Presidential Election
8:45 am Fed's Loretta Mester speaks
1:00 pm Fed's Eric Rosengren speaks
4:15 pm Fed's Robert Kaplan speaks
8:30 am Import/Export Prices
10:30 am EIA Petroleum Status Report
12:00 pm Fed's Eric Rosengren speaks
6:25 am Fed's William Dudley speaks
8:30 am Jobless Claims
8:30 am Producer Price Index
8:30 am Consumer Price Index
8:30 am Retail Sales
10:00 am Consumer Sentiment
Next week is the planned entry window for the SPY Iron Condor for June. Monday will be 39 days prior to expiration, so we will look to enter sometime in the coming 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,