Condor Options

Lots of selling today, obviously – the Dow was down 214 points, although it was actually the best performing index today on a percentage basis. Some uglier ducklings:

• RUT/IWM down 3%
• XLF (the Financials ETF) down 3.46%
• GOOG down 3.35%
• GS down 3.83%
• C down 4.42%, and having taken out its January lows, Citigroup is now at levels not seen since 2002.

A few technical items worth noting: 1) the volume today wasn’t quite what you’d expect for a move of this size – the impression we had all day was that any lifts were met with such heavy resistance that buyers just kept stepping out of the way. So if buyers are conceding the point, does that mean we saw “concession”? 2) Not quite, at least not in IV terms: while all of the volatility indexes saw significant lifts today, they’re still relatively tame in the sense of not having even pretended to approach late January levels. 3) The VIX:VXV ratio says “Ni!” to you, with a reading of 1.02 about as defiantly non-meaningful as you can get. 4) And technical studies aren’t signaling any extreme oversold states at this time: RSI(2), RSI(14), stochastics, MACD, etc. etc. all are perfectly happy to see more selling.

Trade-wise, that’s fine with us. We’ve already closed out one March position for a sweet profit, and our open DIA and SPY positions are both still profitable. Our QQQQ trade is just slightly underwater, but the Qubes are also the most oversold at the moment, and our breakeven points are far enough away that we’re perfectly happy to see what next week will bring.