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Friday, July 7, 2017

Taking profit on ascending triangle breakout trade in choppy market

General market $SPX continued to drift down in the last 3 weeks while Nasdaq fell below its 50DMA this week and it made a lower high/lower low bearish pattern in last 4 weeks. In this choppy market environment, my trading style requires low market exposure and lower number of trades to control risks.

Today, market is rebounding up with lower volume. My ascending triangle breakout trade on C diagonal spread showed some profits after the price of C got close to target price of $69.19 in one month, which was much faster than expected. Considering I have to take a multi-week vacation and the choppy market, I decided to close this positional trade for an acceptable profit.


Also on yesterday, the short call July 7 $244.5 on SPY reached $0.02 to create a good profit as $SPY moved sideways most of time, as shown in the chart below. So I bought it back and sold a new July 28 $244 call for a credit of $1.02. I plan to hold this long term diagonal unless SPY 10 week EMA crosses down 40 week EMA.

Now, I have closed all of my near term trades in preparation for the vacation in which I'll have much less time to watch over market. The remaining open positions are longer term and I'll continue to sell calls or buy protective puts should the market turns bearish.

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