Friday saw a lower close for the week; could it be a sign of things to come?
The broad market closed slightly lower Friday after disappointing earnings from giant Amazon. The benchmark index SPX closed down -3.32 points after recovering from a 10-point drop earlier in the day. Friday's close at 2472.10 represented a slight loss for the week of 0.1%. It's anyone's guess as to what will happen next week, we have a lot of economic data to come as well as the "uknown" geopolitical events lurking both in the USA and abroad.
Below is the open position status:
SPX Weekly Iron Condor
This position was opened Friday, July 28; details below:
SOLD SPX August 4 2500 Call, .95 credit.
BOUGHT SPX August 4 2510 Call, .40 debit.
SOLD SPX August 4 2435 Put, 2.90 credit.
BOUGHT SPX August 4 2425 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 of the position as of the close Friday:
SPX August 4 Weekly Iron Condor:
Below is the SPX chart showing the short strikes:
SPX 6 month chart
Think or Swim is currently showing the position +$50, the current debit to exit is $.75. Our orders remain in to close for $.65 which would be target gain, or if the max loss reaches 10%.
The guidelines call for the position to remain open until target gain is reached, as long as SPX stays between the short strikes. They also call for exiting at the pre-set max loss, or if SPX reaches either short strike. It is recommended to have "good to cancel" order in for both target gain and max loss. The setup of conditional orders can vary by broker, so please check with your broker if you are unfamiliar with conditional orders on your trading platform.
Next week's economic news, is summarized below:
9:45 am Chicago PMI
10:00 am Pending Home Sales
9:45 pm China's Manufacturing PMI
8:30 am Personal Income & Outlays
9:45 am PMI Manufacturing Index
10:00 am ISM Manufacturing Index
10:00 am Construction Spending
8:15 am ADP Employment Report
10:30 am EIA Petroleum Status Report
8:30 am Jobless Claims
10:00 am Factory Orders
10:00 am ISM Non-Manufacturing Index
8:30 am 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 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,