Thursday 7/31 Recap

Whoa.  What happened?

Well, today was an interesting day in the markets, and I think that's an understatement.  

Four of our positions closed.  Split 50/50 on favorable/unfavorable.  In terms of dollars, however, favorable wins out and we had a net positive day.  Added bonus, all our August expirations closed out, so I don't have to worry about that next week.

I did a bit of reading tonight to see if there's consensus on what happened, and what it means going forward.  (Here, here and here.)  

Unfortunately, there is no solid concrete reason for what happened today.  Not that I'm entirely surprised by that.  Here's a few of my take-aways:

• August tends to be a slow month for the markets.  This might mean that we'll be finding more short-term down trends, and we'll be selling more call spreads.  
• The Fed might raise interest rates sooner than originally anticipated.  Guess that means I'll be keeping an eye on all our interest rates and moving cash around if I can find a higher rate somewhere.  Side-note:  I miss the 4% we were earning on some savings accounts.  Let's have that back, and better, please!  On the flip side, then we'll be paying more interest on other things.  Oh well, it's a catch 22.
• Volatility was up today.  Isn't higher volatility good for the markets?  I thought it was, but I don't remember why I thought that.  I'll have to check into that.
• One person anticipates a bear market coming within the next 12 months.  He can't say specifically when though.  

So the big questions of the day:  Was this a fluke?  Are we entering the long-anticipated pullback that we're supposed to be having?  Or will things turn around again tomorrow.

Because we don't know the future, and we don't have a clear crystal ball lying around, we've decided to hold off entering new trades tonight.  We have 2 active positions right now, and we'll look at more over the weekend for Monday.  Right now, we want to see what tomorrow is going to hold.

Closed trades (4 -- yes, that's right, 4 of them):

AAPL -- original trade, sold the 95/94.29 Put Option. -- we had a trail stop in place which kicked in and pulled us out.  Luckily, this had done very well up to this point, so the trail was already in the 'Definite Profit' category.  This closed out favorably, and we made our second highest profit of the new tracking system on this trade.  Yeah!

IWM -- We had 2 trades on, and they both closed out.  Actually, they split evenly on the favorable/unfavorable ration:

• Sold the August expiration 116.5/117 Call option -- so we wanted IWM to stay below 116.50 per share.  It definitely did that, and today's jump down put the option at our profit limit price, so we closed out with our max profit, per our rules today.  That's a good trade.
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• Sold the September expiration 119/120;107/106 Iron Condor -- Well, this changed to a trail stop last night, so we didn't lose our max loss.  We still lost money on this position, but we didn't lose the maximum we accept per our rules.  It actually only worked out to be a $3 loss. 

QQQ -- sold the 94.63/93.63 September expiration Put vertical -- well, this one closed out at our loss-side stop.  Again, though, because of our rules we didn't lose too much, and we're okay with that. 

All-in-all, we still came out net positive today.  And our trading ratio is still better than 50% favorable closes.  So far, so good.

Let's see what happens tomorrow!  Have a lovely evening!