Index Indecision

I didnt make a single trade today, outside of picking up a few contracts on the close for tomorrow. The market was acting a bit indecisive, and appears ready to make a directional decision here in the next couple of days to a week. Since I trade the NDX 100 options for a living, I need excellent entries with limited risk and a clear "I'm wrong" point. Didn't find that at all today, and I missed a few early possible entries only to be glad that they were not taken since a lot of whipsaw action took place.

Not much doing today in regards to the overall market, but this is not surprise. Slow day, as expected all this week, with little in the way of 'big boy' volume since everyone is still out in the Hamptons or the Jersey Shore. Things should really drop off in regards to market action over the next couple of days, however, next week will bring a great deal of 'sizing the market up' type of action from the participants that have been on vacation all summer. Personally, I expect that being defensive and not committing a great deal of risk capital to any one thesis, position, or sector would be a great idea at this point. Since I always try to remain as flat as possible at the close of each trading day, I will continue on as always, but if something does happen to come along that points to a bit of momentum, whatever the direction, I will hop on with a tight stop. 1260 on the S&P 500 is still a major inflection point going forward, and it is hard to see any continued downside without an impulsive break of this level on volume. That said, a test of the July lows does seem increasingly likely. The beauty of my strategy is that I couldn't care less, just give me momentum setups at key support and resistance levels and I can eat.

Currently I have several 'lotto' position plays in the options market, but these are less stratgey based than they are purely taking advantage of Very, very, very cheap plays that give me insurance if and when the market decides to fall off a cliff to test the July lows. In total, these cost me less than $600, and in an ideal situation could produce upwards 10x return. QQQQ's 43 puts, and $NDX 1650 puts.

Unless something great comes along this week, which is not likey due to the historical lack of participation at this time of the year, I recommend keeping your powder dry on initiating new positions or trades until next week. However, as I always do myself, keeping risk capital exposure to only a day trading time frame when the market is lacking full-participation, can save a lot of time, energy, and stress. It's the last push of summer, enjoy it. The Big Boys are back in town next week, and with their return will comes big moves in the market.

Aloha!