Dear Trader, 

The broad markets have been slow the last two weeks.  

And during slow markets like this, it’s best to follow the crowd and not force trades.

I like to stay engaged so I’ll reduce my trading size and try to sell time. 

But you can also step away, relax and enjoy the weather. 

There was a surprise move lower in gold and silver lower, which saw the dollar move higher. 

This was an interesting sell-off since the government is on the verge of passing another 2 trillion pork barrel spending bill.

Right now the market isn’t concerned about those fundamentals. 

Now, the CBOE Volatility Index (VIX), aka the “fear” index, is at 16.15 above our key 15 level.

This is a two point drop from last week and that divergence in volatility has come in.

So the bias is higher for now. 

Now let’s talk shop.

Portfolio Update

Here’s a recap of what we did this week.

On Monday:

No action

On Tuesday:

Sell-to-close the CSCO Aug 6th, 2021, $56/57 call spread

Sell-to-close the CVS Aug 6th, 2021, $81.50/78.50 put spread

On Wednesday:

Buy-to-open the SNAP September 17, 2021, $80/$90 call spread

On Thursday:

No action

On Friday:

No action

Right now, we’re holding:

• EDU Aug, 2021, $10/$12.50 call spread
• FCX September 17, 2021, $38/$41 call spread
• SNAP September 17, 2021, $80/$90 call spread

Joshua’s Journal

This is my journal which is a debrief of every trade closed or expired to analyze what happened, why it happened and how it can be done better — like what the military uses after missions.

CSCO Aug 6th, 2021, $56/57 call spread

Outcome: 12% gain.

Notes: We executed this perfectly for this position. We can’t control how big a winning trade could turn out to be, but we can control how we execute and stick to the system. 

CVS Aug 6th, 2021, $81.50/78.50 put spread

Outcome: Closed for a 64% loss..

Notes: We executed this perfectly for this position. Being short is tough and there were a few times this position went into the black. We don’t want to trade earnings releases and why we exited. But in hindsight this would’ve worked even though the profit window on the reaction was very short. 

Now it’s time to get my 7 miles of running in and then head to the pool with a fresh jalapeno margarita - TGIF! 

I'll have a new trade for us on Monday.

To your wealth, freedom, and options!

Joshua M. Belanger