On Friday I closed a bunch of positions because I wanted to lighten up on my short vega. After today I am very happy with my decision to flatten up my vega. Also my second SPX butterfly for this cycle that I set Friday was taken off today up 17.24%, this was a quick trade and I did not want to be greedy so I took the money off the table.
SPX chart to me is still in a consolidation mode, and selling delta neutral spreads is the way to go. I still think we could go lower back to the 50% retracement around 1290. I don’t think we will go higher like we did in the first half of the year until we have a big capitulation. A lot of people are bearish on this market and until we get a short covering rally that forces the bulls back into the market I think we will see little to no real direction in the market. If I had to pick a direction (which as a statistical probability of 50/50) I would pick lower. I base my lower bias off the chart and Fib lines. With that said my short term target on the SPX is 1290. A trade that I will be looking at if we get close to 1290 in the next day or two is selling strangles in IWM.