THIS MONTH'S POSITION

Due to Christmas vacation no position will be posted this month. Merry Christmas and Happy New Year!

TRADING SYSTEM SIGNAL - CLOSE DEC POSITION

It's possible to close our position for about a 10% profit today. So, I think we'll take advantage of the volatility rush caused by today's down move and head for the sidelines:

Calendar Spread:

Close - 6 Jan/Dec 111 SPY Call Calendars for about $1.22 each

Hedge the Calendars:

Close - 1 Dec 105 Put at about $0.40

UPDATE

The SPY continues to trade in a channel with support at 109 and resistance at 111.75. Our trade is in good shape now but a close outside this range either way would call for adjusting the position. With the December jobs number coming out tomorrow that could happen soon.

TRADING SYSTEM SIGNAL - OPEN DEC POSITION

Our "window of opportunity" is beginning to open up and it's time to initiate our December position. The Market tried to correct in early November but didn't get very far before the buyers swarmed back in. So we enter our December position with the risk of a major correction still hanging over us. However, markets consolidate through time by moving sideways or through price by pulling back. At this point there is no way of knowing which route this market will take. So like good soldiers we trade on. We want to continue our hit-and-run Guerrilla Trading tactics as the VIX (volatility) is still a little too high for comfort. That makes Calendars and Butterflys ideal for this environment.

We are in a Market Structure Stage 3 with a slight uptrend bias on the Daily Chart, and a Stage 3 consolidation occurring on the 30m Chart. This month we'll start trading with multiple contracts to accommodate more hedging and adjusting possibilities. So we'll set up shop with a Calendar Spread at the 111 strike:


Calendar Spread:

Open - 6 Jan/Dec 111 SPY Call Calendars at about $0.98 each

Hedge the Calendars:

Open - 1 Dec 105 Put at about $0.96


___________________________________________________