The NYMO is at extremes. The NYMO daily is above 280 and the intraday hit 91. The internal was weak and the NYSE UP to down volume was low (3.65). All previous cases happened in the bear 2008 and all gains were eventually erased (but it could take months). Another thing, Spy was up 2% and TRIN was above 1. 73% chances it closes red next day. Thanks to Cobra for that information. On the contrary, bullish percentages are very strong and the ascending triangle suggest more upside. Could this be a repeat of the 2014 Oct rally? I don’t know. In my plan, I always hold off on upside adjustments if NYMO is in extreme extremes like this and I wait for a pull-back to adjust. I did get burned in 2014 but that was with strictly MIC trades.
RUT has moved about 110 points and that’s at the extremes of what it normally does on a bounce.
To qoute Vbrandy from a recent skype group chat:
RUT moved -17.44% from Dec 29 in 14 trading days
Had an 8.22% bounce in 8 trading day most of which was first 3 days
Fell -9.08% in 8 trading days
+11.81% in 12 trading days
Because of all those reasons (massive overbought, high volatility environment etc), and the fact that it only hit my adjustment points after 3pm, I did not do any upside adjustments today. This is overheated. I still have some March trades on but I’ll wait till Friday or Monday to close on any modest pull-back. I don’t have too much upside risk in March still this took away some sig. profits. I was going to close most of it around the open of the day but held back and was going to wait till end of day as planned…doh.
My April trades are suffering big with this up move. I will have to adjust to the upside within the next day or two if it continues with strength. I’d like to give it till Thursday/Friday. I’ve got 1060 CC’s, 1050 CCs and 1000/1050/1080 call BWBs hedging now and those soon won’t be effective. THis will alleviate some of the upside issues as well as they start to lose as it continues up past the strikes. So yeah, these will all need to be removed soon and replaced if it shoots much past 1055. The odds are good that I’ll get a better adjustment point but still, this is stress. I can’t handle too much more up, maybe a touch of 1058 or thereabouts before I really have to adjust. I fear that this may go to the next RUT upside target of 1070 and I just can’t handle that move without an adjustment. Tomorrow I will be monitoring closely. This environment is pretty hellish.
As a completely unrelated trade, I did initiate some bearish butterflies at RUT 1052. I know this adds negative delta, but this is a completely unrelated trade. I bought several May and April 1020 BBs.