RVPCS – 10.09.2015 (No Entry)

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Russell 2000 – Vertical Put Credit Spread

The market is up this morning off of news indicating that the FED may delay the dreaded rate hike.  From Econoday:

“Most participants at the September FOMC saw liftoff conditions being met by year end, a view that will likely boost expectations, at least perhaps slightly, for a rate hike at the December FOMC. But most members believed that conditions in September had not materially changed and it was prudent to hold off on liftoff, though one hawk, Richmond’s Lacker, argued that low rates were no longer appropriate.

But there are definitely dovish overtones as several members pointed to low oil prices and the strong dollar as risks to the Fed’s 2 percent inflation goal. Some said downside risks to the economy had increased. It was also noted that the expected path of the federal funds rate, rather than the exact timing of the initial increase, was most important in influencing financial conditions.

Data dependence ages the minutes, putting into focus recent data headlined of course by the soft September jobs report that, at the time, all but scratched any expectations for liftoff at this month’s FOMC and pushed the odds for December to below 50/50. Today’s results perhaps do underscore that members had been strongly leaning, as recently as last month, for a 2015 increase. Markets were choppy in immediate reaction to the minutes but have since settled back to little changed.”

The sharp rise in price has reduced the volatility of the RUT.  Further, the open interest is all over the place.  I don’t feel comfortable with creating a position.  As the day progresses price may prove to show a direction.  For now the technical indicators are also showing indifference.  Price is in the middle of the price channel and the RSI is mid range.

I am targeting no strikes between now and expiration morning on October 16 (OCT) of this coming week.

RUT _ 2015.10.09

*Charts from Trade Architect™

Open Interest:

Price at 1165, PUT OI peaks all over the place as seen below. Note that the orange highlight is reflecting the price fluctuation as calculations were being performed.

OI _ RUT 10.09.2015


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