Live: Monday, March 13, 2017

3/13 – 4 p.m. New York time

I made two trades today, exiting a profitable options position on JWN and entering a shares position on IEF.

3/13 – 3:15 p.m. New York time

My exit order on JWN went through, getting me out at 25% of maximum potential profit.

3/13 – 2:45 p.m. New York time

I have entered a longer-term share position in IEF, an exchange-traded fund based on 7- and 10-year U.S. Treasuries.

I base the trade an Elliott Wave analysis that suggests that an end to the 5-wave price decline from the July peak of $114. The analysis, under Elliott Wave theory, suggests a large retracement to the upside. The fund pays a monthly dividend at present prices and rates of 1.82% annually.

Basically, it’s a good parking spot for unused funds, providing some dividend income and the chance of capital gains.

3/13 – 10:50 a.m. New York time

Although lacking potential trades into new positions, I am attempting two exits at my target prices: JWN and SGMS.

Otherwise, the cupboard is bare.

3/12 – 10:05 a.m. New York time

I have no prospective trades on my desk for Monday, and indeed none in sight until Wednesday and Thursday. In other words, a typical week between earnings seasons.

I have been looking at potential plays unrelated to earnings announcements, but given how low implied volatility is these days — the VIX ended the week at 12%, close to its 10% low for the year and well below its 27% high — I am finding it impossible to find any that meet my liquidity and implied volatility standards.

So I’m looking at slow week, unless the Federal Open Market Committee in its money policy announcement on Wednesday somehow upsets the apple cart. Very low odds of that happening, I would say, but the chance of it happening is greater than zero.

By Tim Bovee, Portland, Oregon, March 12-13, 2017

 

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