OPNewsletter (Apr’10) +4.86% (Open)

US Markets continued its uninterrupted uptrend. The Dow has surged for two months with very few setbacks and has advanced 17 out of the last 21 trading days; that’s an amazing performance. A pull back is necessary to release short term overbought conditions. And if I were to say that markets are now vulnerable for any pull back anytime, that won’t be an exaggeration.

For OPNewsletter April portfolio, we have invested 88.15% of capital and we are up +4.86% in the first week. Starting this month, I have started to focus more on “end of the day trading” i.e. trading alerts are being sent either pre-market or post market hours. Though it would not completely possible to avoid to sending any alerts during the market hours (especially during last two week of options expiration), so far, at least, we have been able to achieve this.

This month’s portfolio is a nice balance between several type of income trading strategies. We carried forward two portfolios from Mar and opened 7 new portfolios across various types of industries. Our income strategies include Double Diagonal spread, Calendar spread, Iron Fly, Butterfly Spreads, Reverse Butterfly spread, iron Condor as well as vertical spreads.

On the speculative strategy front, we shorted BIDU on Mar 24th, and we were nicely rewarded as BIDU dropped over $25 in 2 days. Those who played it via vertical debit spread, generated over +15%.

There is a lot on the economic front this week. Personal Income and Outlays will set the tone today; consumer confidence and S&P Case-Shiller tomorrow, ADP Employment data on Wednesday, followed by a busy Thursday that will see Motor Vehicles sales report, Jobless claims, ISM Manufacturing index and construction spending. An employment report could bring a complete turnaround on Friday.

Trade carefully, Trade profitably, OP



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