The buy-the dippers are alive and well as the first week of July came to an end.
The broad market closed higher Friday after a better-than-expected unemployment report was released Friday morning. The report indicated that the US added 222,000 jobs in June, the second largest jobs number of the year. Friday's recovery came after a 22-point selloff on Thursday.
The benchmark index SPX closed up +15.43 points, .6% at 2425.18. This gain represented a weekly gain of +0.1%.
Below is the open position status:
SPX Weekly Iron Condor
SOLD SPX July 14 2450 Call, 1.00 credit.
BOUGHT SPX July 13 2460 Call, .35 debit.
SOLD SPX July 14 2370 Put, 2.45 credit.
BOUGHT SPX July 14 2360 Put, 1.80 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:
SPX July 14 Iron Condor:
The position is currently +$25 as of the close; the debit to exit is $1.05 according to Think or Swim. The position is 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 $.70, 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 G20 Meetings
9:30 pm China CPI
Tuesday, July 11
12:00 pm Fed's Lael Brainard speaks
10:00 am Janet Yellen semi-annual testimony on monetary policy
10:30 am EIA Petroleum Status Report
2:00 pm Beige Book
8:30 am Jobless Claims
8:30 am Producer Price Index
11:30 am Fed's Charles Evans speaks
8:30 am Consumer Price Index
8:30 am Retail Sales
9:15 am Industrial production
10:00 am Business Inventories
10:00 am Consumer Sentiment
Next week is the planned entry window for the August SPY Iron Condor. Monday will be 39 days prior to expiration, so we will look to enter the position early next 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,