Sunday, September 14, 2014

Weekly Market Reivew N225

N225 closed at 15,948.29 on Friday, 12-Sep-2014, gained 279.61 (1.78%) over the last 5 trading days. NKVI gained 0.34 (1.93%) ending the week at 18.

NKVI continue to climb with N225, despite slower, like last week.  This is unusual.  Such anomaly should not persist too long.  Else, something unusual may happen.  Let's watch it carefully.

Last week, I mentioned that the range could be expanded to 15,000-16,000 range. It was almost there.  It reached a high of 15984.90 on Friday.  Will 16,000 be a resistance?  Or will N225 bash through it and challenge the previous high at 16,320.22?  Let the market tell us.

Both the weekly and monthly chart look bullish.  It seems that they are going towards the previous high of 16,320.22.

October PositionCall Spread 16500/16750
October Position has a paper loss of about 13 points (JPY 13,000, before commission).  N225 is about 540 points away from the Short Call.  Delta is at 0.1626.  DTE (Days To Expiration) is 26 days.  

This position is bad.  The loss is almost 100% (credit was 14 points).  One of my adjustment criteria is when loss is 200%.  I have to watch closely this.

Delta is also bad at 0.1626.  The other adjustment criteria is when it is over 25 to 30.  This is the second item I need to watch closely in the coming week.

If either one of the above criteria met, I will make the adjustment.  With DTE only <26 days, I will not roll up.  Instead, I will roll out and up to November contract.

The at the money call 16,000 is selling at 185 (Ask price).  The sellers do not believe N225 will be above 16,185 at October expiration?  The at the money call 15875 is selling at 240 (Ask price).  The sellers do not believe N225 will be above 16,115 at October expiration?  So, is my Short Call 16,500 safe?

November Position : Call Spread 17250/17500
November Position is currently at a paper loss of about 1 points (JPY 1,000, before commission).  N225 is about 1300 points away from the Short Call.  Delta is at 0.0957.  DTE is 61 days.  This position looks good.  No action required.  Waiting for opportunity to add the Put Spread leg to form an Iron Condor.

Trading Calendar
Monday Sep-15: OSE will be closed for trading

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