Daily Commentary
As expected the market took a bit of a reprieve today. The move lower was not enough push the broad market (SPY) outside of its short-term consolidation phase. I expect this type of price action will continue ahead of the closely-watched jobs report Friday. Currently we are in SOH (sit on hands) mode patiently waiting for another high probability set-up to rear its head.
This is the great thing about diversifying into strategies that take advantage of different market scenarios. While our ETF Advantage is sitting patiently on the sidelines in cash, mostly likely in an account accruing 5%, our Short Iron Condor and SPY Diagonal LEAPS strategy are making strides as the market remains complacent.
SPY Diagonal LEAPS Strategy
Sideways price action is always helpful in theta driven strategies like the new SPY Diagonal LEAPS strategy.
SPY was down $.31 today and strategy actually increased $90. Yes, by most standards $90 is a paltry gain in a $20,000 strategy. However, now we know that theta is kicking in a bit and should continue to increase as we approach expiration on the 19th.
So far the strategy is up $575 or 2.9% in our test account since it was initiated on September 24th.
In our monthly report due out this weekend, we will discuss the strategy in more detail with risk profiles, greek analysis and more. Remember, for those of you interested in the strategy and how it works please continue to follow along in the blog.
Subscribers please follow the newsletter as we will have a more detailed account of the strategy and its guidelines. We wil also be adding the strategy to our White Paper and wil also post the strategy with our other options strategies on the Insider’s page.
Overbought/Oversold for October 3, 2007
S&P (SPY) - 66.1 (neutral)
Russell 2000 (IWM) - 67.8 (neutral)
Dow (DIA) - 63.8 (neutral)
Nasdaq 100 (QQQQ) - 65.1 (neutral)
Subscribers please check the Insiders’ page of the website if you wish to check the overbought/oversold levels of the following 22 ETF’s: OIH, XLF, XLE, XLY, XLK, XLV, XLB, XLI, XLP, TTH, XLU, GLD, FXI, ILF, EZU, EWA, INP, UNG, DBA, DBB, DBE, and DBP.
We work hard to bring you our latest views, opinions and research on a daily basis. If you are a loyal reader and find our thoughts useful please show us your support by joining our newsletter service. We currently follow 3 stock options strategies in our investment newsletter, the ETF Extremes, SPX Short Iron Condor and SPY Diagonal LEAP.
If you want to an in-depth, step-by-step look at how we trade our strategies purchase our acclaimed E-Book! With your purchase you will receive Two Free Months of our investment newsletter plus unlimited access to our Insider’s page enabling you to follow our strategies as you learn. What do you have to lose? Join today!
Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com