I missed my blog last evening. After the market closed, I decided to fix one of the sprinkler heads in my underground sprinkler system. Then I discovered I had a leak in the underground piping. Before long, I found myself in a muddy hole in the yard. By the time I finished this "simple little project", it was late and I was tired. I will be traveling this evening (on my way to the Traders Expo in Dallas), so I will miss writing my blog this evening as well.

SPX erased all of Tuesday's gains yesterday, reminding us that we are in a bear market trend, at least for the intermediate term. Today SPX is up modestly, trading at $1269 as I write this. RUT has not been trading quite as bearishly, but is still in a downward trend, currently trading at $783. It is worth noting that the charts of the major market indexes have been in a clear downward trend since early May. This may be a correction in a longer term bullish market, but until proven otherwise, we are in a bearish trend. For example, of the four positions I recommended for our trading group subscribers, one was a bearish trade (gained 32%), two were sideways (gained 29% and 2%), and only one was bullish (gained 20%). The single bullish trade was on a stock that was trading upward while the overall market was bearish. The point is to examine the overall market trend first; then determine your individual stock trades. Currently, that suggests a bias toward bearish or sideways types of trades.

My July iron condor on RUT stands at a P/L of +$1,320 with a position delta = +$39 and theta = +$80. The Aug condor stands at a P/L of +$200 with a position delta = +$4 and theta = +$56. The spike upward in volatility has reduced the current P/L of both positions, but they are still very well positioned with the short put option deltas in both trades at 13. Upward spikes in volatility hurt the iron condor, but this is only relevant if you are forced to close the trade early. If the underlying index price remains in our channel, our ultimate profitability is still available to us.