Monthly Archives: September 2016

9-30-16 – Intraday Update

9-30-16 – Intraday Update

AMZN (Amazon) is now on it’s fourth day higher and has exceeded it’s Keltner Top for the third day in a row. I’m going to add another spread to take advantage of a possible quick reversal as a result.

 

Sell to Open 10 Oct 7 $870/$890 AMZN (Amazon) Vertical Call Spread @ $1.23 ($1,230 Credit)

  • Sell Oct 7 AMZN $870 Call
  • Buy Oct 7 AMZN $890 Call

amzn-9-30-16-intraday

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9-30-16 – Trading Strategy

9-30-16 – Trading Strategy

What I’m In



9/22/16 – BRZU (Brazil) @ $37.25 ($7,748 Position Size)
9/22/16 – RUSL (Russia) @ $72.22 ($14,954 Position Size)
9/23/16 – Short EWJ (Japan) @ $12.64 (19,718 Position Size)
9/28/16 – TMF (20+ Year Treasury Bonds) @ $28.50 ($12,214 Position Size)
9/28/16 – 3 VXX (VIX) Oct 21 $29 Calls @ $4.50 ($1,350 Position Size)

What I’m Buying


Sell to Open 20 Oct 7 $218/$221 SPY (S&P 500) Vertical Call Spread @ $.40 ($800 Credit)

  • Sell Oct 7 $218 SPY Call
  • Buy Oct 7 $221 SPY Call

Sell to Open 10 Oct 7 $860/$880 AMZN (Amazon) Vertical Call Spread @ $1.05 ($1,050 Credit)

  • Sell Oct 7 $860 AMZN Call
  • Buy Oct 7 $880 AMZN Call

What I’m Selling


Sell BRZU (Brazil) Limit @ $39.65 6.44% or ($499 Profit)
Sell BRZU (Brazil) Stop Limit @ $28.50 or 23.49 or ($1,820 Loss)

Sell RUSL (Russia) Limit @ $75.50 8.00% or ($1,196 Profit)
Sell RUSL (Russia) Stop Limit @ $63.00 12.77% or ($1,909 Loss)

Buy to Cover EWJ (Japan) Limit @ $12.42 1.74% or ($343 Profit)
Buy to Cover EWJ (Japan) Stop Limit @ $12.90 2.06 or ($405 Loss)

Sell TMF (20+ Year Treasury Bonds) Limit @ $30.00 5.26% or ($642 Profit)
Sell TMF (20+ Year Treasury Bonds) Stop Limit @ $25.00 12.28% or ($1,499 Loss)

Sell 3 VXX (VIX) Oct 21 $29 Calls @ Market 

Today’s Update


market-snapshot-9-29-16

It’s getting nasty again out there. Notice how strong the global correlation of markets is. If you aren’t hedging, you are getting beat up. We’ve been seeing global markets move up and down together for the past couple of weeks. No direction is completely safe to hold onto it seems.

Crude Oil broke out of it’s triangle consolidation today and what the heck is going on with SOXL (US Semi Conductors) completely bucking the trends?

Not a lot of turmoil out of the US FOMC speech today, but Deutche Bank brought back memories of the Banking Crisis during the last bubble that hit the market. I looked at selling DB (Deutche Bank) calls since the implied volatility is huge, but I don’t like the amount of credit I would get since it’s only an $11.00 stock. It’s a bit too risky, though all the technicals line up for further decline.

Regardless, uncertainty and fear cause sell-offs and volatility to rise which is why I’m constantly looking for hedges. My VXX (VIX) Calls yesterday were well timed as they offset some of the decline in RUSL (Russia) and my BRZU (Brazil) positions.

Performance Update


performance-9-29-16

Some decline in the overall profit since I’m slightly overweighted in bullish trades. I’m going to try and fine some additional bearish trades to take on to hedge against what could be more downside movement.

What I’m Buying


Sell to Open 20 Oct 7 $218/$221 SPY (S&P 500) Vertical Call Spread @ $.40 ($800 Credit)

  • Sell Oct 7 $218 SPY Call
  • Buy Oct 7 $221 SPY Call

The SPY (S&P 500) hasn’t shown much strength for the past couple of weeks, but the sideways movement didn’t provide much premium to sell options, but now that we’re getting a volatility spike, it’s helping my VXX (VIX) calls, but it should also allow me to get filled on this spread.

I purposely use wider spreads so I can take in more credit. I will manage this trade to ensure it doesn’t get past $218, so the $221 call that I buy is just to reduce my buying power and also allows me to put on the trade in my IRA account.

spy-9-29-16

Sell to Open 10 Oct 7 $860/$880 AMZN (Amazon) Vertical Call Spread @ $1.05 ($1,050 Credit)

  • Sell Oct 7 $860 AMZN Call
  • Buy Oct 7 $880 AMZN Call

Amazon is at a Keltner Top again so I’m expecting a short term reversal soon. I’m getting a fantastic premium being able to sell calls at high as $880 which is a good size move for Amazon to take me out. Also of note, Amazon is doing amazingly strong as an individual company despite the markets turning downward. This is something to take note of for longer term investors. The strong stocks during down markets are the market leaders during bull markets.

Looking at the option chain, there is still some decent volume at $880, so I should be able to get a fill if Amazon doesn’t drop out of the gates tomorrow. Implied volatility is ranking about half of what it’s seen this year, so a quick move down is all I should need to take a quick profit.

amzn-9-29-16

What I’m Selling


Sell BRZU (Brazil) Limit @ $39.65 6.44% or ($499 Profit)
Sell BRZU (Brazil) Stop Limit @ $28.50 or 23.49 or ($1,820 Loss)

brzu-9-29-16

Sell RUSL (Russia) Limit @ $75.50 8.00% or ($1,196 Profit)
Sell RUSL (Russia) Stop Limit @ $63.00 12.77% or ($1,909 Loss)

I’m surprised RUSL didn’t do as well today despite a strong move higher again in UWTI (Crude Oil). The correlations are usually in lock step, but it’s not a daily occurrence. It’s looking like my $72.22.

rusl-9-29-16

Buy to Cover EWJ (Japan) Limit @ $12.42 1.74% or ($343 Profit)
Buy to Cover EWJ (Japan) Stop Limit @ $12.90 2.06 or ($405 Loss)

Japan continued it’s decline today, and now hopefully I’ll get a couple more days or two lower to take out a profit. This is a bearish position which will hedge against downward moves in BRZU (Brazil) and RUSL (Russia), but it’s a non leveraged ETF so the moves won’t be as profitable.

I used to traded JPNL (Leveraged Japan) and JPNS (Leveraged Inverse Japan), but JPNL just doesn’t have the volume to get good prices when buying or selling and JPNS was delisted due to lack of volume as well, so the only liquidity is in EWJ (Japan).

ewj-9-29-16

Sell TMF (20+ Year Treasury Bonds) Limit @ $30.00 5.26% or ($642 Profit)
Sell TMF (20+ Year Treasury Bonds) Stop Limit @ $25.00 12.28% or ($1,499 Loss)

Small gain after an opening gap lower today in Bonds. Almost to the level of profitability, but this one is going to take more patience. This is why I’m keeping my profit targets smaller because getting strong trends out of these markets has been tough to find these past few weeks.

tmf-9-29-16

Sell 3 VXX (VIX) Oct 21 $29 Calls @ Market 

Today’s move higher added some guaranteed profits to my position. With a lot of news from the FOMC tonight and other economic numbers coming out overnight, in Asia and Europe, I’m guessing most of the volatility is going to be in the opening bell tomorrow.

So instead of trying to push for a higher spike in volatility, I’m going to sell my VXX contracts on the open tomorrow and take whatever profits I can.

When trading VXX (VIX) you don’t want to stay in long. As you can see, volatility spikes don’t go on for more than a day or up to 3 maximum. Today was a good move, but I’m expecting a drop in volatility tomorrow so I’m going to take whatever profits I have that were intended as a hedge in case the FOMC said something to upset Wallstreet for tomorrow.

vxx-9-29-16

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9-29-16 – Trading Strategy

9-29-16 – Trading Strategy

What I’m In



9/22/16 – BRZU (Brazil) @ $37.25 ($7,748 Position Size)
9/22/16 – RUSL (Russia) @ $72.22 ($14,954 Position Size)
9/23/16 – Short EWJ (Japan) @ $12.64 (19,718 Position Size)
9/28/16 – TMF (20+ Year Treasury Bonds) @ $28.50 ($12,214 Position Size)
9/28/16 – 3 VXX (VIX) Oct 21 $29 Calls @ $4.50 ($1,350 Position Size)

What I’m Buying


  • Loaded up on positions for now and looking to possibly hit some profit targets tomorrow to reduce my exposure. We have two FOMC speeches tomorrow which could create unintended volatility.

What I’m Selling


Sell BRZU (Brazil) Limit @ $39.65 6.44% or ($499 Profit)
Sell BRZU (Brazil) Stop Limit @ $28.50 or 23.49 or ($1,820 Loss)

Sell RUSL (Russia) Limit @ $75.50 8.00% or ($1,196 Profit)
Sell RUSL (Russia) Stop Limit @ $63.00 12.77% or ($1,909 Loss)

Buy to Cover EWJ (Japan) Limit @ $12.42 1.74% or ($343 Profit)
Buy to Cover EWJ (Japan) Stop Limit @ $12.90 2.06 or ($405 Loss)

Sell TMF (20+ Year Treasury Bonds) Limit @ $30.00 5.26% or ($642 Profit)
Sell TMF (20+ Year Treasury Bonds) Stop Limit @ $25.00 12.28% or ($1,499 Loss)

Sell 3 VXX (VIX) Oct 21 $29 Calls @ $10.00 ($2,222 Profit)

Today’s Updates


market-snapshot-9-28-16

Huge push mid day today with Crude Oil exploding after OPEC announced an oil production freeze agreement. I happen to be able to watch the market intraday which is why I jettisoned my position in DGAZ (Inverse Natural Gas) once I saw this rapid reversal in price occurring. This doesn’t necessarily put us in the clear, FOMC Chair Janet Yellen is making a speech tomorrow AFTER the market close. There will be other FED speeches through out the day, and we saw a couple weeks ago what someone’s opinion could do to the market.

My goal is to hopefully close out some positions tomorrow riding on today’s recovery, but I’ll be watching my VXX (VIX) Calls closely for a quick scalp if volatility does pick up.

Sold DGAZ (Inverse Natural Gas) Limit @ $5.74 7.29% or ($1,202 Profit)

My original target was $6.00, but since we saw such an explosive move higher today, it got my attention quick. What also caught my attention was when it started turning downward and eventually moved lower than what it opened at so I emailed the subscriber base as soon as I saw this and sold shortly after.

dgaz-9-28-16

This is the move lower I was referring to that caused me to sell off early. ON the 5 minute chart I saw 6 down bars in a row which signaled a clear sign of a reversal move, so I immediately sold.

dgaz-9-28-16-5min

Performance Update


performance-9-28-16

Performance has improved dramatically today. First, I was able to sell my DGAZ (Inverse Natural Gas) position, but also many of my other positions recovered a great deal. They are still slightly negative, but another day or two higher and I should be able to take off profits off the table to close out the month.

What I’m Watching


ERX (Energy Exploration Companies) – Something is not like the others, can you spot it? Yeah, that HUGE move higher today on massive volume. The good news of the oil output freeze could send ERX (Energy Exploration Companies), UWTI (Crude Oil) and RUSL (Russia) soaring to new highs. We could easily break this $33.00 resistance level tomorrow which would make it a great consolidation breakout buy.

Because I’m already in RUSL (Russia) I won’t be buying this as I’ll be doubly correlated, but I wanted to highlight this for those who aren’t already in RUSL (Russia).

erx-9-28-16

What I’m Selling


Sell BRZU (Brazil) Limit @ $39.65 6.44% or ($499 Profit)
Sell BRZU (Brazil) Stop Limit @ $28.50 or 23.49 or ($1,820 Loss)

Fantastic recovery today in BRZU. I’m going to leave my stop in place for the time being as we’ve already seen what happened when I moved it up prematurely in YINN (China) which is also on it’s road to recovery. My profit target is a reasonable hit for tomorrow so I’m leaving the same orders in place.

brzu-9-28-16

Sell RUSL (Russia) Limit @ $75.50 8.00% or ($1,196 Profit)
Sell RUSL (Russia) Stop Limit @ $63.00 12.77% or ($1,909 Loss)

With the big move higher today as a result of the Crude Oil Freeze agreement, RUSL should be a big benefactor. I’m leaving my other orders the same in other markets, but I’m moving up my sell order to the previous high of $78.00 to see if I can squeeze some more out of this move in Oil which RUSL directly correlates with.

rusl-9-28-16

Buy to Cover EWJ (Japan) Limit @ $12.42 1.74% or ($343 Profit)
Buy to Cover EWJ (Japan) Stop Limit @ $12.90 2.06 or ($405 Loss)

Small move lower today, but still rather flat. Same orders for tomorrow.

ewj-9-28-16

Sell TMF (20+ Year Treasury Bonds) Limit @ $30.00 5.26% or ($642 Profit)
Sell TMF (20+ Year Treasury Bonds) Stop Limit @ $25.00 12.28% or ($1,499 Loss)

My stop order was filled @ $28.50 today and so my initial limit and stop limit orders are now in place based on my fill amount.

tmf-9-28-16

Sell 3 VXX (VIX) Oct 21 $29 Calls @ $10.00 ($2,222 Profit)

Because this VXX call is based on a big spike in volatility, I have to take a guess as to how much of a move we will get. I’m looking at a $5.00 move. The current “delta” for this position is .89 cents. This means for every dollar higher VXX moves, the option’s value will move up by .89 cents. This means the value of the option will rise by about $4.45 based on delta alone. Now if it spikes that much in a day, the premium for volatility will also increase.

Since I purchased this for $4.50 per contract and price would be $4.50 + $4.45 = $9.95, I just rounded it to $10.00. Honestly, I’ll sell this out for less if we get a decent spike that I can capitalize on, but I’ll at least put in a limit order to sell @ $10.00 in case it hits when I’m not watching.

vxx-9-28-16

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