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Quadruple Witching Tug Of War

|Includes: IWM, OEXFF, Invesco QQQ ETF (QQQ), SPY
Broader Market Weekly Performance:
Dow            0.44%
S&P            -1.26%
Nasdaq       -1.27%
Russell       0.28%
  
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MARKET UPDATE:
Although this week didn't make it 7 straight week's of loss across the board, the Market didn't exactly reverse the trend.  More like it just stopped the decline.  Friday's action pushed the Market into positive territory for the week.  But hey, that is better than continuing the decline so I'll take it!
 
The S&P's decline came down to tag the rising 200 DMA and March closing low of 1260 on Thursday with heavy volume.  Friday opened with a nice bounce as buyers bought the technical bounce off the 200 DMA.
 
I anticipated and forecast such a bounce in last week's commentary.  However, now is where it gets interesting:
 
News next week is pretty light with basically only GDP & Durable Goods.  The FOMC will meet but I expect dovish statements to be released and nothing to spook the market.  This lack of market moving news might give the markets the breather it needs to digest the recent weeks of losses and gain some footing. 
 
Momentum points lower but the market is behaving well at support.  It is up to the Bulls to make a stand now.  At this point, I think the only thing that will provide the Bulls the ammunition they need is some type of government news/action like raising the controversial debt ceiling, extending the payroll tax holiday extension, or a Greek debt restructuring announcement.  Until such a game changer is released I am hesitant to get long.
 
One benefit of the recent pullback is the spiking VIX and, therefore, increased options premiums.  I don't really like being short put spreads in a market like this but far OTM spreads are fairly attractive.  Elevated premiums allow you to go further OTM, thereby giving a large margin of safety, while still getting good credits. 
 
As I have stated, I have expected a trading range through the summer and there is a good opportunity now to establish the lower end of that range in the S&P 1250-1260 area.  Let's see what happens and make some money while we find out!
 
What are your thoughts on the market?  Place your comments below!
      
BOOKINGALPHA UPDATE:
Monthly Advisory Commentary:
Quadruple Witching Friday brought a nice quiet expiration for our IWM, SPY, and OEX put spreads.  The returns 9.29%, 8.11%, and 6.38%, respectively.
 
For the portfolio, this leaves only the QQQ put spreads with Quarterly options open.  The recent pullback has made far OTM put spreads attractive but I will be very judicious in deploying them.  I want to watch and see how the Market reacts now that we have revisited the March lows and 200 DMA's. 
 
On the opposite side, it is a little too early to deploy call spreads as if there is a bounce it could be a big one.  So basically, sit back and relax and let the market come to you.  Always remember that the best trade could be not making one at all!
 
Weekly Advisory Commentary:
At no point was I freaking out as AAPL's action was indicating strong support and attraction to the 320 strike; the location of our put spread's short strike.  
 
My delayed adjustment (I didn't release the adjustment trade until about 30 minutes before the close) was by design.  I waited to allow as much premium to decay out of the options I held as possible. 
 
My methodical deployment worked out great as I was able to roll the spread down 3 strikes and out to the next Weekly expiration, all while getting an additional credit to do so!  Good times.
 
*Note - eOption had trouble executing the adjustment so subscribers saw the short 320 put purchased for $0.05 while leaving left the 315 puts to expire worthless.  Profit was therefore reduced from $0.20 to $0.15 for the 2 day trade for eOption account holders.
  
*Note - TradeMonster had trouble executing the adjustment so subscribers saw the spread left to expire worthless and realize full profit on the 2 day trade.
  
*All other brokers executed the adjustment as instructed.
 
Subscribers continue to pile into the new Weekly Advisory service at an overwhelming rate.  Thank you to everyone for making it such a success.
 
  
What are your thoughts on the market?  Place your comments below!
 
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