That was the Week ending 11 August

Why We Love Point & Figure

The triple top on FTSE gave us a massive clue that price exhaustion had been reached. While these are old fashioned they are such a great visual aid. Free from http://stockcharts.com/freecharts/marketsummary.html?E

FTSE’s New  Range.(-240) Higher Volatility up to 18%+

FTSE cash index-    7512 open close 7310 high 7551 low 7297   (  last week 7368 open close 7512 high 7519 low 7368 )

FTSE volatility-     open 9.36 close 13.93   (last week open 10.30 close 9.36 )

What Trades Would Have Done well?

Anything (I mean long Put trades)  utilising volatility, and of course ……….our most recent trades 41 and 42.

Market Volatility

from    9.36-18.55 ( last week  9.02 to 10.92 )   Options volatility curve has, as a result,  gone back to  a smile from a grimace!

News

The Trump circus produces more crazy stuff, but this mostly fails to move markets- Oh Wait!!!! That was last week’s news. This is now on repeat.Again! Who reacted to this? er, just the FTSE really. The mining companies dropped as traders thus conflated Trump’s crazy with less demand for iron ore. OK, EUR also dropped. 41 points in dividends came out of the FTSE on Thursday-Wednesday was a day of pre-empting this. Probably.

Summary

Trade 41– got that wrong…..(So I said last week and offered a number of possibilities)

7400/7300/7100 broken wing put  butterfly  prices    118, 62(x2), 16.5= 10.5 debit-  NOW 23,9.5(x2)3.5=0.5 -ugly

7200/7300/7500  broken wing call butterfly  prices   137.5, 68.5(x2), 6.5.= 7 debit- NOW 270.5,175(x2),28.5= 51 -horrible,worse than ugly!

OUTCOME…….

Now….. 23 for the puts, and 25 for the calls.Win, win.  Thus, we don’t panic with options trades. We quietly profit, or take losss in a measured way.

Trade 42.……. short 7550 call long 7350 put.…….. how about 80+!!!!! Some combo.