Monday, July 26, 2010
My intuition is telling me.........
I think we should be in for some consolidation early this week as the market digest's last week's strong gains. A slight pullback may be in order before we move higher. I also think we will take out the 1125 level in the SPX before going higher to test the 1170 level in the intermediate term. In line with that I will be scaling out of short delta positions and going long probably by selling out of the money put spreads. For this week I'm thinking of putting on a OEX weekly BWB, probably one that is slightly in the money (to get the trade on for a credit). I will also be adjusting my ZB long bond iron condor probably by selling more of the call 131/133 call spreads and buying back some of my 125/123 put spreads.
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Yes, I took off my short delta trades on SPY and IWM for -15%. It's hard to 'pull the trigger' because you're just sure the trades are going to turn back in your favour aren't you? :)
ReplyDelete(and at op-ex they'll likely be smack between the short strikes!)
Do you have any sentiment on GLD 30-60 days?
Hi DP,
ReplyDeleteHmmm GLD is underperforming equities perhaps in a sign that there is still lots of disinflationary forces about. I am neutral on gold for now so sideways strategies might be good. Note that bonds really haven't sold off that much even though risk appetite in equities appears to be abundant so it seems to suggest that there is a dichotomy of sorts between bonds and equities (both staying strong) even though you would classify one as safe and the other risky.
Hi MC yes sideways between 112-124 good for me.
ReplyDeleteI understand gold being an inflationary hedge. Bob Prochter of Elliot Wave is firmly on the deflationary bandwagon...
OEX - directional bias? I see it rangebound 460-530 however my timeframe is macro to yours.