Monday’s Levels
Friday Recap: We had a good week
with a profit of $298.
                            Â
Charts from www.stockcharts.com
Friday was a mixed day for the markets, with the
NASDAQ up 10 and the SOX index up a strong 2% (again). However, both the Dow
and S+P were negative on the day. In the morning all the indices opened strong,
with the cash Dow reaching a high of 10487, before backing off early in the
afternoon to test the 10430 level, were bear flags started to appear. Then just
after lunch in Chicago the market rolled over and the cash Dow came down to test
10400 for the balance of the afternoon. Then at the close, the NYSE was swamped
with sell order imbalances with MOC (Market On Close) orders that quickly and
somewhat artificially brought the index down to close at 10371, down some 72
points on the day with heavy volume of 1 ¾ billion traded on the NYSE.Â
^next^
Prediction for Monday:Â The
markets are going to move higher on Monday. On the cash Dow, I’m going to look
for a quick test of 10400, and then again 10430. However, the important thing
to remember about this week is that it will likely end higher at the end of the
week than where it started. On the cash Dow, I’m looking for a test of 10500-50
this week. You’ll recall that at the start of June we have been calling for a
touch of this level before the end of the month. We’ll also watch for test of
1150 on the cash S+P. Similarly, I’m looking for a touch of 2050-2075 on the
NASDAQ.Â
Portfolio Strategy:Â Right now we’re delta positive, and we’re
going to remain that way until the end of the week. In fact, if the opportunity
presents itself we may get additionally positive during the week. Â
Previous Day’s Results and Current Portfolio Status:
Daily Loss: $195, Weekly Profit $298
9900 July Mini Dow Put Options
Long 4
Yesterday it closed at 22, up 2.Â
Profit yesterday with this position was $40.
10300 July Mini Dow Put Options
Short 5.Â
Yesterday it closed at 95, up 23.Â
Loss yesterday with this position was $575.
10600 July Mini Dow Call Options
Short 2
Yesterday it closed at 32, down 18.Â
Profit yesterday with this position was $180.Â
Mini Dow Futures
Long 1, now flat
We sold the mini Dow at 10470, up 32 from yesterday’s close
Profit on the day with this position was $160. We are now flat the mini Dow.
Estimated margin requirement (may vary broker to broker): $8,965
Delta: +99.66
Gamma: -77.31
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For questions e-mail,
subscriptions@dowoptionstrader.com
Trading Method:Â Mark Melin strategically short sells options and then
directionally trades within this short options portfolio, always hedging one
position against another to generate consistent profits.
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Past performance is not necessarily indicative of future results.
There is a substantial risk of loss in commodity futures and options
trading. It is not suitable for all investors. Only you can determine
whether this trading suits your particular needs and risk tolerance.
All profit and loss representations are hypothetical and based on the real
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adjusted to reflect slippage or commission charges. No representation is
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similar to those shown.