SPX Iron Condor Trading Update

Sunday is the time to review the prior week's market activity and re-assess our current SPX iron condor position. Friday was a wild wide for the major indexes, but they closed nearly unchanged.


Stocks gapped up at the open on strong readings for personal income and spending, manufacturing and construction also helped the early advance. China was then forced back into the picture, with the Commerce Department saying it would start imposing tariffs on some goods. This stirred trade concerns and the equity market dropped as much as 1% intra-day. Late in the day, for the second-straight session, the broad indexes found a second wind and recovered their lost ground. The S&P 500 pared its loss to 0.1%. The Nasdaq closed up 0.2% and the DJIA rose less than 0.1%. For the week, the Nasdaq and S&P 500 both shed 1.1%. The Dow and S&P 600 fell 1% each. The NYSE composite gave back 0.8%.

You will note that MarketClub has generated a sell signal for the SPX, which I saw tick in live that day. Since I am already in an iron condor, I did not open any new stock options position as a result. The erratic action makes for a difficult trading environment, and combined with higher volume across the board it is not a good sign for an early rally following the February 27th sell-off. The market rally has shown signs of weakness in the past few days.

My iron condor is still there and with continued sideways action it could turn out to be a good month. The bear call spread remains my primary concern. The delta of the iron condor position remains negative, so some further downside would be beneficial and would provide some additional cushion between the index and the short call of my bear call spread.

Christopher Smith
TheOptionClub.com