Thursday, December 23, 2010
Monday, December 13, 2010
-On 12/9, SPY broke out of my trading range 117.5-123 that I had forecasted for over three weeks. Problem is that I focused on predicting the future and being right, rather than recommending the best trades, especially when all my indicators turned bullish on 12/2. Here is SPY chart intraday.
Wednesday, December 8, 2010
- SPY still moving within a trading range 117.5-123, that I set forth on 11/17, but bulls have and are still testing the upper end of this range. I was able to sell the 124/126 call spread and 119/117 put spread for combined 0.86 credit yesterday.
-FVE Indicator's value is 17.3, while IV Index Mean according to IVolatility is 15.87 as of yesterday's close. Taking into account market's being closed on 12/24 and the current market bullishness, I'd say IV is close to fair value.
Wednesday, December 1, 2010
- All of the technical indicators did turn bullish today. Based on this, I would expect the probability of SPY moving up towards 123 to be higher than it moving down to 117.5. The Dec18 119/117 put spread closed at 0.51 and Dec18 124/126 call spread closed at 0.32. I would recommend selling 1 put spread and 1 call spread for combined 0.86 or higher.
- Although, based on my scenario and the FVE Indicator, yesterday was the ideal time to sell this spread. FVE indicator's value was 19.67 yesterday and 19.2 today, while mean implied-volatility was 20.4 yesterday and 17.94 today. Yesterday was the first time in two weeks where implied volatility was higher than FVE indicator's value.