The dates on the calendar tell me that we had a change a season a few weeks ago. If you live in the Midwest you may have been wondering if winter was ever going to end, or just continue until June. The last few days in Chicago give me the impression that Mother Nature may be a little behind, but back on schedule. Consecutive days of sunshine and 60 degree temperatures give us the confidence to put away the snow shovel for good this year.

SPRING CLEANING

Along with sun and a few showers, the change of season brings along spring cleaning for many households. The equity markets received a bit of a spring cleaning of their own over the last week. Retreating from contract highs near 1892, the S&P 500 sold off nearly 60 points over a two day slide, for a 3% retracement. With the sell off ending one week and starting off another, many market observers were concerned about a further correction.

As they have done many times over the last year, the bulls showed some strength and stopped the bleeding with a higher close on Tuesday. Wednesday’s release of the FOMC minutes also gave investors some confidence, as the Fed gave hints to their plan over coming months. With Wednesday’s higher close, the S&P has recovered over half off its loss since last Friday. If you look volatility, you should love this market over the last week.

E-MINI STRANGLE

With the recent up and down moves, it’s a bit harder to call direction. I think the market can push up to last week’s levels, but there is still the concern off another downside correction. Looking for a move either way I like buying the April E-Mini S&P 500 1885/1845 strangle. Buying a put and a call at the same time gives us the ability to take advantage of a move from the current market level. I am looking for entry at 9 points ($450.00) or better, with an exit target of 20 points. Risk is limited to the cost of entry plus fees and commissions. The April options expire on 4/17, so this is a short term trade.

The new season and new quarter are a great time to do some spring cleaning of your own. Are your risk parameters working for you? Are you staying disciplined and sticking to your trading plan? Evaluate you trading and see what is working best for you. Use your knowledge and experience to help you trading account grow.

WEBINAR

For those interested Walsh Trading is holding our weekly grain webinar series this Thursday April 10th at 3pm central time hosted by our Senior Grain analyst Tim Hannagan. Tim has been ranked #1 by Reuters and Bloomberg in 2011 and 2012 for his most accurate end of year price predictions for soybeans and corn. Registration is free and if you cannot attend live, a recording will be sent to your email upon signup.

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.