After the big bullish move at the beginning of the week, the market has nicely consolidated its gains. The NDX and DOW closed with gains on Friday, while the SPX was only slightly down. The RUT is the real headliner almost hitting an all-time high on a weekly-closing basis.
Volatility fell and so did the SKEW - down to 121. These are more inline with a bullish market. The last standing pillar of negativity remains in the Put/Call ratios. However, that is changing quickly and they are rolling over to buy signals.
With all that happening, I was looking for some we morning weakness to close out the big bearish credit spread I put on Monday. Friday there was weakness for a few hours in the morning, so I bought back the Dec2 SPX 2200/2210 call spread for $1.70 - calling it a break even. Now I am less worried if the market continues to rise. In fact, I expect that we have another 10-15 trading days before we would really see weakness. Any short-term sell offs are chances to add put spreads.
With that in mind, I added another put spread on the weakness in the AM also, as we had one expire for max gain Friday. This time I sold the 2110/2100 SPX put spread that expires on Nov16 for 75 cents.
