Condor Options

Coming into the week we were watching a triangle consolidation pattern on the 60-minute chart of the S&P 500, and that pattern resolved to the upside within minutes of the market opening Monday morning. If there were any doubt left about the short-term trend, it was answered resoundingly by yesterday’s gap open above the key 850 – 858 resistance zone we’ve been watching since support there failed two weeks ago.

Most breakouts are retested before moving higher, and this one appears to be headed for just such a test this morning. If support holds and the uptrend resumes, we’ll be looking to cut the delta and boost the theta of our SPY double-diagonal by rolling the put side up a few strikes. This would put us in a better position to ride out a move up to resistance in the 92 range. Of course, if support fails, we’ll stay right where we are.