I was not able to up-date the blog on Friday, but there was an adjustment added to the SPX butterfly. The SPX continues to show some decent buying on the up-trend line. Also if you notice IV on the bottom of the chart it is headed for the lows of the year. I am going to start adding protective units if we get down to 14 on IV. Volatility will be to cheap not to take advantage of buying some units, but my reasoning is to protect the overall portfolio from rapid market decline. In a previous post I talked about the market feeling like we could retest 2012 highs, and with the trend line still intact gives me a short term bullish feeling. A key area we need to close above is 1375, if we can’t close about that level, my feeling will switch very quickly. The second scenario is breaking the up-trend line, if we do that my target will be 1290-1300.
On the SPX adjustment all I did was add a couple more butterflies. Below is the adjusted trade.