10/29 Daily Summary

Another pretty busy day in the markets, I've highlighted the 1+ st. deviation days, and one can see we have had a pretty busy past couple of weeks. Looking at the price action chart it is easy to spot we're trading some choppy waters for sure.

Position's Details
10/29 RUT Iron Butterfly
10/29 MNX Iron Butterfly
10/29 NDX Iron Butterfly *Paper*

Price Action & Forecasts:

10/29 NDX Iron Butterfly *Paper*

I've decided to test a 20-day iron butterfly on NDX, my goal is to start experiencing with a larger-sized position, for this particular trade, I'll keep the deadline for the profile curves as 11/13.

10/29 RUT Iron Butterfly

I decided to keep on working on the trade. After all, there is still a lot of time for recovery. So I gave it an adrenaline shot and am looking forward to a few quiet days, or even slightly bullish, so that volatility collapse back to normal. We'll see.

10/29 MNX Iron Butterfly

MNX posted a great recovery Yesterday. I saw the trade leaning negative deltas but decided against adjusting. My thinking behind is that if we do move higher Friday, the volatility will further collapse and that will balance things out. If we don't or if we even drop a bit, by not adjusting I save some more over-adjusting.

10/28 Daily Summary

Do I have to say anything? Market dropped like a rock and volatility rose like a rocket! There, simple as that.

FinViz wasn't painting a full RED picture until later in the day. Vertical Solutions forecast showed that conditions were worsening by the hour, and I used that indicator to take action prior to end of day. It didn't save me on the RUT, but made a good difference on MNX..

Position's Details
10/28 RUT Iron Butterfly
10/28 MNX Iron Butterfly

Price Action & Forecasts:

10/28 RUT Iron Butterfly

The price action coupled with the volatility pop was harsh on the trade. I could not contain the damage. Frustration is the best way to describe my feelings about this. I had to sleep over it before writing about it, it was a shalow night to say the least...

I have hedged and I'll give it a day or so before yanking the rest of it out. I have to re-think how I'm trading the RUT, and I might do things very differently next month. For starters, I'll paper trade a larger NDX position, not sure about what to do with the RUT, I might just focus on the MNX iron butterfly as it seems to be the only trade working well for me lately.

10/28 MNX Iron Butterfly

The trade is still under the tent. I have hedged it against the down-side and paid attention not to fully cut the theta. Should we move back up Tomorrow the position will recover, otherwise I have contingent orders to further hedge the down-side and will open another butterfly.

As the market was rolling down, I was also rolling my short PUT strikes, both the 177.5 and 175 became delta hogs in the same day, so I rolled them all.

10/27 Daily Summary

The market was mixed most of the day Today, it pushed lower in the final minutes, but kept bouncing back and forth until then.. Volatility (VIX and RVX) increased by a bit Today, and that isn't helping the position yet. Then again, a small drop in volatility will make a huge difference here.

The 5-Day volatility spike registered another -0.5 extreme. If we back off, we'll be going back into the range, otherwise chances are we're looking at a down-trend starting up..

Position's Details:
10/27 RUT Iron Butterfly
10/27 MNX Iron Butterfly

Price Action & Forecasts:

10/27 RUT Iron Butterfly

I wasn't planning on doing any adjustments on the RUT trade by end of day Today, however, in the final minutes we pushed lower and I decided to trim off some deltas by using a debit PUT spread.

Now it is a matter of watching the volatility, once it backs off, even by a little bit, the trade will get a lot better!

10/27 MNX Iron Butterfly

MNX moved about 1 st. deviation Today, by end of day I wasn't ok with the deltas and decided to cut them in 1/2 buying a long put took care of it.

The T+14 Forecast still shows reaching the target with the caviat that if volatility comes back even by a tiny bit, the trade will recover really fast.

10/26 Daily Summary

We were moving up +1 st. deviation during early trading, then suddenly dropped back to zero and below. That sent volatility to the roof and I admit I started to think about intra-day adjustment on the RUT trade. After looking at FinViz and Vertical Solution charts, I realized that I could wait until the end of day before making my move.

Notice that VerticalSolutions showed a reversal in probability, but never went to an extreme point. The FinViz chart is a bit more subjective, but you can also see that we're not looking at a "brigt red" picture all over the map, we see some dark spots and even some green.. Once it was all said and done, I was able to adjust the RUT without overpaying for the intra-day volatility.

Now, notice the price action chart, see how RUT is reaching an extreme for the 5-day volatility spike chart, that is very different from the MNX picture.

Position's Details:
10/26 RUT Iron Butterfly
10/26 MNX Iron Butterfly

Price Action & Forecasts:

10/26 RUT Iron Butterfly

I made adjustments to the position by end of day Today. I rolled the 620 Put into the 600 level, and decided to open a new iron butterfly at the 590 strike to benefit from the pop in volatility. Those two adjustments injected more theta into the position and should volatility come down it will look really good.

I decided against selling the 590 Calls, opted for the 600 instead. I don't want to be rolling up if we bounce from these levels.

10/26 MNX Iron Butterfly

Between Friday and Today's close one would think we didn't move much. However, the fact is that we moved higher 1 st. deviation intra-day this morning and then crashed down during the day. This created a spike in volatility and even though the position didn't move much, the volatility is keeping the profits away.. Should things settle down it will come back.

10/23 Daily Summary

It was clear to me that we were moving down about 1 standard deviations, The FinViz map was bright red and the VerticalSolutions forecast was pointing to readings below the -8000 level for a good portion of the day. If I needed to make adjustments, I would have waited for a pull back intra-day and then entered the adjustments, that would avoid buying PUTs in the worst possible time.

Position's Details:
10/23 RUT Iron Butterfly
10/23 MNX Iron Butterfly

Price Action & Forecast charts:

10/23 RUT Iron Butterfly

RUT dropped a bit over 1 st. deviation Today, I decided against touching the position, as the T+7 curve still looks pretty good. My plan is to look at the forecast lines more than the T+0 line in order to decide when to make adjustments. For better or for worse, I hesisted the urge to adjust Today.

10/23 MNX Iron Butterfly

MNX didn't drop as much as the rest of the indexes. The position goes throught the weekend right in the middle.

10/22 Daily Summary

I didn't quite pay much attention to the market action Today, as I checked prices mid-day, the FinViz chart was showing a bullish mood, but that wasn't such bullish on the VerticalSolutions chart, so I figured we'd be pushing close to 1 st. deviation, which was ok given the fact I intended on adding to my positions Today one way or another.

Notice how the Financial sector was pulling everything up.. That's very clear on FinViz and VerticalSolution charts. That's Another reason I added both to my daily study, they allow me to see if price action is isolated to one specific sector or if it is something happening accross the board.

Both trades are doing good and getting the benefit of this range-bound environment.

Position's Details:
10/22 RUT Iron Butterfly
10/22 MNX Iron Butterfly

Price Action & Forecasts charts:

10/22 RUT Iron Butterfly

Added the 2nd half of the trade Today, the position is doing very good.

10/22 MNX Iron Butterfly

Added the second 1/2 of the position Today, so far this trade has been going on very well.

10/21 Daily Summary

As MNX was pushing higher intra-day, I noticed that move was not confirmed by RUT nor SPX. The FinViz map was not that bullish and the VerticalSolution chart was showing decreasing strengh. That led me to wait for the end of day before touching the position, sure enough MNX faded the move and closed flat.

One thing that is calling my attention is that RUT has become active in the past few days, I've seen 2x 1 st. deviation days in a row and also noticed Volatility has picked up by about 8% on my iron butterfly. Let's keep an eye out for it, call it a yellow light in my dashboard.

Position's Details:
10/21 RUT Iron Butterfly
10/21 MNX Iron Butterfly

Price Action & Forecasts:

10/21 RUT Iron Butterfly

Rut has started to become more active again. Notice we had about 2 1 st. deviation days to the down-side, and volatility has picked up by about 10%, this to me is a yellow light on the dashboard.

10/21 MNX Iron Butterfly

MNX pushed up intra-day, reaching the 1 st. deviation point. I got an alert and checked out the market conditions. I've noticed that RUT and SPX were not following suit and that the FinViz map was not that bullish, also noticed the VerticalSolution chart was starting to pull back.

Result: I avoided adjusting intra-day and getting whipsawed. MNX finished the day flat.