Weekly Review 3 – 7 Sep 2018 (Stock, Gold, Crude Oil markets)

S&P 500 futures hit all time high 2917.5 before retracing back to 2872.7. All the moving averages are still trending up despite being lagging indicator.  Traders who are bullish on the market can nimble in when the futures touches 10 weekly SMA. Expect a sideway market for the next few weeks.

Screen Shot 2018-09-09 at 10.04.47 AM

Crude oil futures continue to trade between 10 SMA and 50 SMA. As the uptrend is still not confirmed until futures protrudes above 10 SMA decisively, it is recommended to wait for a clearer trend before entering the market. Options income trader who follow the suggestion earlier (at your own discretion of course) should have made some good income. Options income trader can close the previous position to lock in the profit and continue to sell iron condor at 76 (bear side) and 63 (bull side) respectively at further maturity date to take advantage on time decay while waiting for a clearer direction to form.

Screen Shot 2018-09-09 at 10.05.17 AM

Gold futures continue to trend down. Touching 10 weekly SMA should indicate a better probability of shorting instead of going long. Unless the futures break 200 weekly SMA decisively, the outlook of the gold futures is bearish.

Options income trader can open to sell a bear call credit spread (e.g. Sell 1235 Call and Buy 1230 Put) to take advantage on the existing market sentiment and time decay. For a more advance trader, the credit that is collected can be used to fund another debit spread position (buy a bear put debit spread). Position sizing and money management needs to be considered as this can be a 2x leverage.

Trader mindset #3 As a rule of thumb, always calculate the worst case scenarios (max that you can lose) and if this is acceptable, then take the trade; else ignore it. Profit will always take care of itself.

Screen Shot 2018-09-09 at 10.05.37 AM

Advertisements

5 thoughts on “Weekly Review 3 – 7 Sep 2018 (Stock, Gold, Crude Oil markets)

  1. Hi, can you help clarify your suggestion for /GC BCS credit spread of sell 1235 call and buy 1230 put? Do you mean BCS(credit spread) sell 1235 call, buy 1240 call? thanks.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s