Interesting Markets

Interesting markets, still down some money because of crap I had to carry over from 2013, but the horizons are set for good returns. We are back in a traders market. Range bound and cyclical. I have a feeling the next few months are going to be like this, but this is the market forming a long term top.

The chart above is a weekly chart, and as you can see it takes months for tops to form. However, be careful because even before the collapse we see extreme volatility, and this is why we tend to maintain a slightly short delta bias. Long VIX calls are always decent hedges considering the tail risk. Sometimes pairs trades work; selling QQQ volatility and buying SPY volatility which was a great trade last week if you skewed the pair to the short side enough is a good example. I personally though have been keeping the large positions in the indices. If you have followed my trades on dough.com you will see many trades being QQQ trades, and that is just me maintaining basic short strangles. If we see the VIX fall anymore you will likely see me begin buying QQQ volatility including puts, straddles, and long bearish diagonals. The reason for this is when we get a bad downside explosion the Nasdaq tends to explode to the downside at a faster rate. If we see the 12/11 print in the VIX,  I will begin initiating parts of the trade

As for my personal stuff it has been indices and lots of weekly or shorter term trades. They have been working for me much better. I have put out several weekly ratio trades along with a few other custom orders. These have been extremely profitable. My large positions have generally been in the QQQ and a few in the SPY. Strangles have been doing well lately, but I also have to do wide iron condors because of the capital requirements with strangles. The weekly trades have been undefined risk because that is what works for me. In larger stocks I will buy a strike wide out to define the risk, but undefined is my wheelhouse.

I will go into a specific article later about what my weekly trades look like. A few other guys that have really good weekly trades are the Shadow Traders. I do not get anything at all for promoting them, but they do have some interesting stuff. You can find them at shadowtrader.net or Shadow Trader uncovered on tastytrade.com