AprWk2 - SPY & GLD Market Summary

AprWk2 SPY Market Summary - From the looks of it, we have reached another all time high. The market closed at $158.80. The Kijun Sen and the Tenkan Sen are merged together for the moment, signaling some indecision in the markets and possibly a change in direction soon. Or it could move together in tandem like what it did a couple of weeks ago, and keep everyone in suspense.

This week technically is a great week to sell a call spread for the SPY, the market opened strong on Monday and then Tuesday, it also went upwards. It was a good opportunity to sell a Call Spread. But I was too busy to enter.

Wednesday was a huge surge upwards, and it would have burst the $159/160 trade that I was looking at. The next safe trade would be the $160/161 which was available, and even that was close to shutting down on Thursday when the market stretched upwards and nearly crossed over the $159.71. Very close shave. I was too timid to enter into the market.

I was in fact certain that I could sell a trade on GLD come Friday.

AprWk2 GLD Market Summary - I was looking closely at GLD when the market opened. The market had gapped downwards already by about $2.40 and I was all ready to enter into a trade. I was looking at selling the Put Spread $146/147 for a premium of $0.06, and I could easily get it tonight especially after seeing the premiums so stressed.

Then I thought, it is not usual that the market would gap downwards, not especially for GLD, which is technically supposed to be tapered down on expiry day. Well, one thing I learnt from my years of investment is that you are never as smart as the market. The moment you try to trick the market, you will no sooner realise that the joke's on you.

So I did the wise thing amidst moments of uncertainty, and that was to watch. I had a feeling that GLD would dip a little and that I would be able to sell a nice Put Spread and possibly make a premium of at least $0.08. Little did I realise there was a lot of shifting of money from GLD to US markets. The SPY is at an all time high, and commodities naturally had to take a back seat as investor let go of their GLD holdings.

The lowest that GLD went to on Friday was $143.43. It closed at $143.95, after a spiraling drop of more than $7 dollars. If I had sold the trade, I would have been caught with my pants down. Let's just say it would have burnt out my entire account (and a lot more).

Needless to say, many must have been caught. It's the bloodbath of the year, indeed one that we haven't seen in a long time. GLD is still going down by the way.