The SPY has been trading in a series of equal sized boxes for 6 months and it looks like it is going back to spend more time in the box it just left as the attached chart illustrates. Very hard to make money on directional trades in this environment. Another factor that I am starting to run into is that underlying stocks have such high prices that at the money options real dollar cost is too high.

For example on Thursday I really wanted to buy the dip in Meta… at the money options for 8 weeks out were $18! Yeah a spread can work in that situation and I do like the advantages spreads can provide, but nothing really made sense for a directional long trade (I was trying to set up a “diagonal calendar”, which I have found is very effective if the option prices work, but in this case they just didn’t. Seeing more and more of that as well. Net result is a tough trading market and long time readers know in those circumstances PATIENCE PAYS! I am sitting on my hands till good opportunities again present (which they will). 

Thanks,

Joe