BY MARK SEBASTIAN
March 31, 2025
Hey Traders,
So the big question is … is this setting up a bottom, or setting up a blow out?
The last selling cycle we watched the VIX (the red line) climb but never blow up, then a quick and strong drop.
Now with the S&P 500 falling again, VIX is picking up nicely, but it’s not hitting old highs.
So this sets up one of two ideas.
The fear top was in mid-March … or that was a gear up to something truly special.
My Take: it’s pretty 50/50. But if you look at where option prices are set, April 2nd seems like a seminal moment.
Notice the higher vol ahead of April 2nd and the relaxing volatility after non-farms … things come to a head this week.
Speaking of things this week, this is going to be the best time to enter income trades. You start jumping in Thursday and Friday – you will most likely be extremely happy. Join Hans here.
Let’s Recap Friday’s Trade
We are long a bear XSP spread that expires on April 2nd. I think you know why.
If today is inside – which it might be – I’m going to be going with the trend.
…Today’s Outlook
I got to tell you. I’m leaning bearish until Tuesday. But … we could be pretty inside, which is what I’m hoping for…
If we aren’t inside, it’s going to be a really ugly sell off. We’re not getting a rip before the 2nd – unless something DRASTIC happens.
Call Ted if you aren’t currently a member – 888 872 3301.
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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