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Looks like we are getting the ESm early April seasonal dip this year. It usually lasts until April 11th. (people withdrawing money from the market to pay taxes?)
Early April’s Bullish Inclination
Posted on April 3, 2017 by Rob Hanna
The study below is one I have shown here on the blog a few times over the years. It examines the bullish inclination the market has had in early April.
Numbers here appear impressive. Of further note, sixteen of the 1st eighteen years were higher on day 4, but the 2012-2014 instances saw mild declines. Meanwhile, the 2-day time period has been positive 10 of the last 11 years, with 2015 being the only loser and closing down less than 1 SPX point. So potentially bullish early April seasonality is something traders may want to keep in mind the next few days.
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Like most of these things its very very start/end date specific.
First two days in April are big up moves, so the difference between last day in March vs April Xth vs 2nd date in April vs April Yth is significant.
Using your own chart...
A shout of thanks to @ron99 for all his effort to share info with us on this thread!
I sold EW3N7p1900p1600(2) on 3-21 for 3.35. Exited on 4-5 at 1.90. Held 16 days, MOI was 3.6% using 8x margin.
Looking to add a position this week sometime.
Do you have any rules for yourself when to roll or get out of the strangle when it goes against you?
I started last summer withe rules mentioned in the Cordier book (200% rule, although on strangles he is less defined). But I find you have to give far OTM options considerable room to breathe.
For a strangle now I roll the untested side when the tested side has a delta of about 15; this worked so far but I have limited experience and no ability to backtest.