Bernanke Acts As Expected, Markets Fall For 2 Weeks Straight

Broader Market Weekly Performance:
Dow -0.49%
S&P -0.33%
Nasdaq -0.21%
Russell -0.01%
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MARKET UPDATE:
Markets have now closed 2 weeks in a row in negative territory snapping their 6-week long rally. Friday markets were all over the map with futures posting solid gains before the open. After the open things were quiet until Uncle Ben's Jackson Hole Speech not committing to additional QE but not taking it off the table either. Market gyrated thereafter dipping into negative territory but stregthend to close up solidly.

Bernanke reaffirmed his pledge of lending additinoal QE support if waranted. This coming Friday's Unemployment Report will be key to whether the Fed has the ammunition it needs to launch further QE when they meet later this month. The ECB will take center stage this week on Thursday when they are scheduled to discuss the meat behind Draghi's statement (if there is actually any meat) of doing "whatever it takes" to save the Euro.

Needless to say, with all the events scheduled and expected economic data, trading volumes and volatility should pick up toward the end of the week and definitely next week. We will be looking for a slow grind this shortened trading week with an upside bias. The upside remains limited until something changes (QE, ECB actions, etc). Trade the S&P range of 1395-1422 until it breaks directionally.

Navigate wisely and stay profitable, my friends. Happy trading!

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BOOKINGALPHA UPDATE:
Monthly Trading Service Commentary:
Our DIA & SPY Sep spreads, which were rolled from August due to risk management for improved credit, remain in good shape and are positioned well considering the current market and the limited upside for markets here.

We opened a new IWM Call spread this week. IWM remains the weakest of the indexes and the trade is positioned nicely with 3 weeks left until expiration.

The The Monthly Trading Service continued its profitable run for August posting an +11.04% gain after the +4.70% gain for July.

Since May the Monthly Trading Service has posted a +31.42% portfolio gain while always maintaining a minimum 20% cash reserve.

While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility

Monthly Trading Service YTD vs S&P 500:
+9.83% YTD BookingAlpha Monthly Advisory
vs.
+11.84% YTD S&P 500
See Trading Record


Weekly Trading Service Commentary:
The Weekly Service closed the Debit Spread Hedge on the put side of the DIA Strangle this week for a tidy +11.9% ($0.40) profit. This trade and profit will not be reflected as it's own trade in the Track Record but will instead be reflected in the DIA Strangle where the cost of the Strangle will be reduced by the overall cost of the trade.

Reflecting the trade on it's own would not be an accurate representation and would skew the returns of the portfolio. The performance of the portfolio would look better if we did but it would be shady and misrepresentative. We will stick to telling the truth like always. The reduced cost of the Strangle positions us to profit even further on upcoming market gyrations.

The SPY put expiring Friday 8/24 was rolled via the "out & down" technique for a nice $0.20 credit. A Debit Spread Hedge was then created by selling a put to generate an additional $0.32 premium credit. We have employed this roll strategy repeatedly to reduce the our overall cost of the trade to <70% of the original debit while still maintaining a profit opportunity.

The Weekly Trading Service has posted a portfolio gain of +28.6% in the past 8 weeks while always maintaining at least a 20% cash reserve.

While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility.

Weekly Trading Service YTD vs S&P 500:
-3.83% YTD BookingAlpha Weekly Advisory Portfolio
vs.
+11.84% YTD S&P 500
See Trading Record

Check out the BookingAlpha Trading Record

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