Yo Pit Crazies,

President Biden gave a big inflation speech Tuesday and the S&P 5000 closed up .25%.

Almost 4,000 on the button, in fact.

Still, it was not enough to deflect current sentiment and drive stocks higher.

Currently, only 16% of stocks are above their 200-day moving average. Most, if not all, of those are energy related. That is very much attributable to the change in policy from the White House and tightening of supplies due to Ukraine-Russia …

Big Oil just stopped investing in more Big Oil.

Gas prices up 100% year-over-year when energy and food are the things people buy every day is not going to sit well with the public. They will be looking for someone to blame …

That brings me to the consumer price index (CPI) number out today. It will be high, as anyone who bought anything in the last month can attest.

The market might be coming to the end of caring about it.

3,750 SPX Is in The Cards

Note below the straddle in the one-month options for SPX is $280.

That is the value of the call and put together. and the markets best way of predicting a range in 30 days. (The range is twice the straddle.)

SPX June 10 expiration from LiveVol Pro

The 3,750 number is in range and a poor CPI number could keep us on the path to it.  3,750 is also where SPX started the year with stimmy checks and unbridled Fed monetary policy.

The market has a way of correcting mistakes and most of what I see is expecting some kind of mild recession.

Should continue to be a lively week, but I do expect the VIX to be lower by Friday – just not a whole lot lower.

The Rundown

Nitro Trader

Mark closed two Zoom Inc. (Ticker: ZM) May20 95/80/65 put flies for an 87% gain.

Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session. 

Kiran closed some of a Cap Gains trade idea. He was in for 1.60 on the puts.

To Your Trading Success,

AG