The VIX Is Telling Me To Take Profits

The Option Pit VIX Light Is Red, And Volatility Is Likely To Drop.

Hey Traders,

Heading into Tuesday, everything in the market looked great for a serious drop in volatility …

But then things started to change …

The market is acting nervous.

I am starting to see some little things in my indicator that say the market is not 100% happy …

What am I seeing?

Check this out …

Monday marked the second day in a row the VIX closed below 17 …

We had not seen three closes below in a row since the start of the pandemic …

I thought we had a real chance for that to change on Tuesday …

But, on Tuesday we closed at exactly 17.

Now, we’re another day forward, and a few things have changed …

There are a couple of things that make me wonder if maybe we really are going to see S&P 500 (Ticker: SPX) 4250 this week.

Let’s start with correlation.

Take a look at the VIX and the SPX:

SPX is barely off the highs from Friday …

But the VIX has jumped over 1.5 points.

Traders are buying protection, and that can mean a near-term top.

Now look at VVIX, the VIX of VIX options:

After being pretty dormant for the last two weeks, VVIX suddenly exploded higher …

What does that mean?

Traders were buying options.

The good news? Most of the demand was still for July puts.

The bad news? There were some decent call purchases snuck in there …

Traders bought over 55,000 June 20-strike calls!

What I am seeing still gives me a red light, but it is NOT as bright red as it was …

My take, I think we are dealing with memes and a BIG Consumer Price Index (CPI) number coming …

However, I still think it flushes out …

That said, I don’t think taking profits on winners right now is a bad idea.

I am long a lot of puts, and will be looking to pair winners.

Your Only Option,

Mark Sebastian

A Fifth Ocean and Surprising Tesla Competitor?

Hey Influence Traders,

An absolutely massive, and I mean massive, amount of important news has come down over the past 48 hours.

But none more important than what Income Hunter Bill Griffo will announce.

At Noon EST today he will host a special event that could impact your wealth forever!

Its called …

“The Digital Currency Arms Race: How You Can Stay Ahead of the International Plot to Kill the US Dollar.”

Apparently, a brewing digital currency showdown could DESTROY our monetary supremacy!

Bill is going to lay it open.

If you haven’t signed up yet, you can do so HERE.

A Fifth Ocean

There’s a fifth ocean apparently … who knew!

Not happy with four, a bunch of scientists have officially declared the water around Antarctica to be the “Southern Ocean.”

All this time, it was right there …

The Keystone XL pipeline is dead

Early this year Biden scrapped a border permit for the Keystone XL pipeline, which has now led the company behind it, TC Energy Corp. (Ticker: TRP), to officially shut it down.

TRP is a diversified company, but this announcement does not help its outlook or that of the thousands of pipeline workers counting on it.

“Income Tax Out; Wealth Tax In” for Infrastructure Spending

Collapsing talks between the White House and GOP around Biden’s infrastructure spending proposal caused a bipartisan group of Senators to take tax increases off the table to spend for the infrastructure proposal.

Despite Biden’s desire to tax high-income earners and corporations, Sen. Jon Tester (D-Mont.) said that tax increases are not under consideration. An alternative was not put forth.

The group is also looking at a reduced proposal of around $900 billion, compared to Biden’s initial $2.2 trillion proposal.

Pfizer and BiioNTech Vaccine Deal

The White House has reached an agreement with Pfizer (Ticker: PFE) and BioNTech (Ticker: BNTX) to provide 500 million COVID vaccine doses to low-income countries over the next year, but it might not be as lucrative to PFE and BNTX as it sounds.

The word on K Street is that the U.S. will pay for the doses at a “not-for-profit” price. More to come when I figure out exactly what that means, but my gut says that PFE and BNTX will still make some money on the deal.

China Bill

The Senate passed a bill to spend $250 billion to make U.S. manufacturing and technology more competitive with China.

The legislation, a win for Senate Majority Leader Chuck Schumer, passed 68-32 and promises to meet the economic and strategic challenge from China.

Schumer stated that “whoever wins the race to the technologies of the future is going to be the global economic leader — with profound consequences for foreign policy and national security as well.”

$190 billion in spending is authorized, with the majority of that going to universities and other institutions like the National Science Foundation, Department of Commerce, Department of Energy, National Aeronautics and Space Administration, and DARPA for R&D.

Importantly, it also includes $52 billion in emergency outlays to help domestic manufacturers of semiconductors expand production in light of the global shortage of chips that has hampered automotive and electronics production. We’ll wait to see if Intel (Ticker: INTC), Nvidia (Ticker: NVDA), and Texas Instruments (Ticker: TXN) benefit.

President Biden has endorsed the bill, but it still has to make its way through the House.

Crypto Warnings

SEC Commissioner Hester Peirce warned her colleagues that overregulating cryptos will dampen innovation and discourage investors.

Peirce, one of two Republicans among the five commissioners at the Securities and Exchange Commission, stated in a Financial Times interview that “I am concerned that the initial reaction of a regulator is always to say ‘I want to grab hold of this and make it like the markets I already regulate’ … [and] I am not sure that’s going to be great for innovation.”

El Salvador Makes it Official

El Salvador became the first country to approve cryptocurrency as legal tender, which could open the door for others.

While El Salvador currently uses the US dollar as its official currency, this move will require businesses to accept Bitcoin (BTC) as payment, allow Salvadorans to pay taxes and bank loans in BTC, and when Salvadorans convert BTC to other currencies they won’t pay capital gains tax.

This is a major push for BTC as its legal tender status could force other nations to treat it as a tradeable currency with El Salvador. It could also lead other countries to follow suit.

EV Storage

I read a story recently that Apple (Ticker: AAPL) is in discussions with Chinese EV battery makers CATL and BYD about becoming a supplier for the Apple Car.

However, AAPL has made it a condition that potential battery suppliers must build manufacturing facilities in the United States, which could dampen those discussions.

In light of that story and Biden’s Buy America policies, it has caused me renewed interest in domestic suppliers like battery start-up QuantumScape (Ticker: QS).

I like QS and have it in the PowerMoves starting line-up, but it is far from a sure thing since a lot of the noise around it has been what it CAN do and not what it has actually done.

Big talk does not always work out as we recently saw with Lordstown Motors (Ticker: RIDE). That former EV truck darling just announced in a regulatory filing that funding concerns were causing a “substantial doubt” about its ability to continue as a going concern. 

Andrew and I do not have any trades on RIDE at the moment.

So perhaps there are more stable ways to play this sector. After all, we’ve done really well with our newest, most favorite EV play in Ford Motor Co. (Ticker: F).

Well another major player from Detroit, General Motors (Ticker: GM), has been ramping up the EV competition.

GM announced last year that it would spend more than $20 billion by 2025 on electric and autonomous vehicle tech, and promised to offer 20 new electric vehicles by 2023.

It recently increased that investment to $27 billion, and 30 new global EVs by 2025.

To ensure that it can do so, GM has also unveiled its new Ultium battery, which can allegedly power an EV for 500 to 600 miles in a single charge.

Could that make boring old GM a Tesla (Ticker: TSLA) killer?

Cutting Through the Noise for You.


Dollar Dominos: El Salvador Commits to Bitcoinn

Hey There Income Hunters,

Very big news yesterday as El Salvador became the first nation to add Bitcoin as legal tender — and pushed the dollar aside as a tag along.

Seems like a pretty good day for my Digital Currency Arms Race webinar!!

El Salvador’s legislative assembly officially approved making Bitcoin legal tender in the country only a couple of days after new president Nayib Bukele proposed the solution.

Washington must be furious!

I don’t think they will take this lightly … don’t forget we went into Iraq and initiated a war simply because they were going to ditch the dollar for the Euro.

Ditching dollars will continue to be an ongoing theme…

Tune in today at noon when I reveal new information on much more powerful countries not only ditching the Dollar but planning to destroy it!

What Does This Mean for Bitcoin

  • I always felt Bitcoin could be a niche market. El Salvador and other countries that lack the infrastructure to have their own viable currency could benefit from its use.

  • The question is, will Washington allow it to succeed? I mean, as hedge fund star Ray Dalio said, Bitcoin’s greatest risk is its success. Central banks hate it because it’s competition for them

  • There are ways Washington can make Bitcoin a miserable proposition by penalizing people for using it.

As you can see in the chart below, Bitcoin’s technicals have taken a hit and are now bearish …

I do think Bitcoin can recover… and if it can regain its bullish trend, then once the US asset bubbles burst, it could attract flows as a safe haven, regain strength and make new highs.

The Dollar Is Hanging by a Thread

The dollar is a different story. There will be pressure on the dollar from so many angles that collapse is inevitable…

When volume begins to build at the lows like this, it makes it hard to overcome the pressure.

The scary part is who wants to come to the dollar’s rescue? Every nation is in a similar situation … 

I actually think the Fed needs the dollar to collapse, but they may want to keep kicking the can down the road to stave off a stock and bond collapse for now.

However, I don’t think the Fed is in control of its own destiny…

Join me today at noon to find out why …

Until then …

Live and Trade With Passion My Friends,