Last day of November is always weak...

November 30th is usually a weak day for the markets. Today was no different. The RUT and SPX started strong, related most likely to news of the OPEC deal and the fact that they were technically due for a bounce. NDX had not shown recent weakness and got caught up today as it lead everything lower. In the end the NDX landed near 4810, a pretty incredible fall of 1.28% on the day! It now trades below its 50 day moving average after never making a new high as all the other major indexes did.

A couple of indicators really stood out today. First, short-term volatility (VXST) marked higher than VIX almost all day. It closed below it, however, unable to provide a bearish stance for the market. Second, the TRIN was extremely bullish today, trading below 0.5 and as low as 0.37, only to spike up on the last minutes of selling in the market. Such bullishness is impressive - and at some level worrisome for the bulls when it occurs on a down day. Finally, much like the TRIN, the TICK never hit low levels today either only twice marking below -600 during the whole trading day. All this shows that the NYSE stocks were strong while the tech sector got hammered.

Tomorrow being the first of the month, and a bullish month at that, should be a day for a rebound. However, the rebound maybe short-lived as many of the longer term indicators mark a peak in the market.

Today's trading was complicated due to the weakness in the NDX, where most all of my bull put spreads exist. I mentioned Monday that I added some put spreads to butterfly the 4810/4825 calls I have expiring Dec1. In addition to that butterfly, yesterday I added a 4820/4790 NDX Dec1 put spread. I had to close that today for a debit of $6.85 before it got ran over. Luckily so, as the market ended down at 4810 - right at the apex of my butterfly!

I sold some additional NDX 4880/4900 call spreads for a credit of $2.75. By day's end they were worth 55 cents. I also added some put spreads at 4780/4770 expiring Dec1 for 95 cents. They were worth $1.20 by day's end. All in all, it was an eventful day with the NDX, but overall profitable. We will see what tomorrow brings!

I will give a full monthly wrap up as overall the portfolios were off about 2% this month.

Same roles for the indexes

Today, again the RUT was the weakest, and the NDX was the strongest. It seems the roles have turned since this uptrend started. Before it was the RUT leading, and the NDx playing catch-up.

McMillan noticed that there has been some heavy put buying (the SKEW actually rose today to above 128) yesterday and today, and that has pushed the P/C ratio higher nad back on a sell signal. We noticed that the VIX is starting to move higher and the short term measures of volatility are coming close to crossing higher than the longer term VIX. With tomorrow being the last day of the month, I would expect to see some selling. This would set us up for a positive first of the month.

In any case, I moved the Nov30 3120/3130 RUT call spread up and out to the Dec09 1345/1355 calls for a debit of $3.20.

I also added a bull put spread on the NDX for Dec01 at 4810/4790 making a butterfly out of the call spreads we have on at 4810/4825. With this trade, we are actually neutral to bullish on the NDX over the next few days.

RUT leads down

Today, the RUT almost closed below the low of last Wednesday. It led to the downside, while the SPX pulled back below the high of last Wednesday, while the NDX was off only a bit.

The RSI and Double Smoothed Stochastics (DSS) - something I never mentioned before on this blog - have rolled over for both the RUT the SPX. This does not mean the price of these indexes will fall immediately, but it provides a basis to start trading more sideways price action in the future.

The pull back has helped our P&L and at the same time, gave me chance to add another put spread on the NDX. This time I just added a 4820/4790 for $3.10 credit that expires in two days. We still have the 4810/4825 call spread on that we have been rolling. The trade is neutralized now with the current put spread.

As we close out the month in the next two days the market might fit into its usual late November - early December weakness. This should be seen as a buying opportunity and set up for a strong finish into the end of the year.

McMillan's indicators are all on bullish signals, and the total Put/Call ratio has given a price target of nearly 2300 on the SPX. However, VIX has been trending higher, and today the VXST almost closed higher than the VIX. So some more weakness is possible.

Yesterday, Today, and Happy Thanksgiving

The SPX opened strongly yesterday, had an intraday sell-off and then closed at new highs. The RUT was again the most bullish for the last two days, while the NDX actually fell today about 0.4%. With volatility so low (VIX around 12) and the market only moving in one direction (RUT up 14 consecutive trading days!), trading has been difficult. I keep having to put on bull puts as the market moves up to counter the call spreads we have on. I will go through all trades below.

Yesterday, I added a SPX 2195/2190 bull put spread that would have expired today for a credit of $1.90. Early this morning, I bought it back for 90 cents. I used this to protect the 2200/2210 spread that we had on already from November 17 which we sold originally for $1.35. I closed that spread out for 1.45 debit early today also. In addition, I also added a SPX 2260/2270 Dec30 call spread for a $1.40 credit. 

I also entered some trades on the NDX yesterday. I had to add a Friday settling 4810/4780 put spread for $1.10. I need some protection against the losses in the NDX 2810/2825 call spread that we have expiring at the same time. I sold twice the number of puts as I have calls. 

Today, I rolled those 2810/2825 calls to next Friday for a debit of $2.90. I am going to sell more puts against this spread in the next few days. 

As for the market, its bullish - obviously. However, many indicators are stretched to the point of very overbought in the short-term. We will see how this bullish period of the next few days acts. 

Call it a dozen for the RUT, nevermind the others

Today was another (massively) bullish day! I was thinking it would open higher and give back the gains... it actually looked like that was going to happen. But the market marched higher and really never looked back. The SPX closed at an all-time high and above 2190 where the max gain on our 2180/2190 call spread was achieved. However, I got out as the market opened higher at only a credit of 7.25 (still doubling our money).

The RUT marked its 12th consecutive higher close. After hours, the markets are up again strongly. This creates lots of stress on our remaining bear call spreads, which we have on all the indexes.

One precarious item today was the VXST move. It actually bolted 13% higher, while all other volatility indexes fell. This may give us an opportunity to make some adjustments and add some bull put spreads tomorrow if we can get an intraday pullback.

The real question is when will the RUT register a down day?

Market gets a little soft

Finally, the market weakened today, but only after a higher open. We are bullish the SPX with our bull call spread at 2180/2190. At the same time, we are bearish the NDX and RUT with our bear call spreads.

In all, we are just managing winners, so anytime these trades can make us money, we will close them.

I added a NDX bull put spread at 4760/4750 on friday around mid-day. This spread will expire on Nov25. It will be interesting to see if we have to adjust it this week, if weakness come into the NDX in a bigger way than expected.

All indicators are bullish so any weakness will be met with more put selling.

Options expiration week - bullish!

Again today the market was bullish, led once more by the tech stocks. NDX almost closed up 1% again. The RUT and the SPX were up about half a percent each. Monthly options expired today, so we have two sets of bull puts on the NDX expiring worthless on tomorrow's open.

The VIX fell, SKEW was flat, and the Put/Call ratios are falling. Everything is bullish, except the SPX chart has not yet made a new high. Its previous high is about 7 points from where it stands now, so we may get the new high tomorrow.

I had to roll our NDX 4810/4820 expiring today to Nov23 for $2.40 credit. Most likely the market will pullback at the beginning of next.

Also, I add to our small bear call on the RUT by adding one further out of the money. Now we have the original one expiring on Nov30 at 1310/1320 and another I added today at 1335/1345 expiring Dec02 for $2,65. The RUT is up now 10 days in a row, any slow down will be welcome and will drop the price of these options.

Finally, we have an SPX bull call spread at 2180/2190 that we purchased for $3.60 a while back. It's worth almost $6.00 now. It expires on Nov21, so I put a 2200/2210 bear call spread expiring Nov23 on for $1.35 to give a little more premium to the trade if the market stalls out at these levels.

All in all, the market grinds higher. With one directional moves like we have seen since the Trump election, its hard to find moments to trade both sides of the market. I expect the extreme bullish move to be finished this week, and more two-way action to start soon.