Yo Pit Crazies,

 

I will be releasing the SPY Master Dossier to members today.

 

It’s a roadmap of how to trade the SPY and the VIX together.

 

If you want to see that classified document, sign up for SPY Master here.

 

In the meantime, there are some broad strokes of the strategy I can share – things all traders need to know.

 

Time for a declassified few secrets …

VIX Zones Are Key

 

One of the first things we do in the SPY Master Dossier is describe the VIX Zones.

 

Those are the quartiles where VIX historically resides.

 

The range of VIX values measured from the mid-80s to today is somewhere around 9 to 100+, and there are four VIX Zones:

 

Zone 1 – VIX 12 and below

Zone 2 – VIX 13 to 17

Zone 3 – VIX 18 to 23

Zone 4 – VIX 24 and higher

 

These help inform any VIX trade I add because of the reverting nature of VIX.  Think of gravity and what goes up must come down. 

 

The very highest value came from the crash of 1987 that predated VIX. The VIX calculation was used on the S&P 100 Index (Ticker: OEX) to estimate the highest print since options were listed.  The 2008 financial crisis and COVID-19 caused the two other largest numbers.

 

The market is currently in Zone 4 ever since the Fed started with the aggressive rate hike posture, which came as a surprise. In general, VIX stays in a given zone until there is a reason to change.  

 

Right now, VIX is staying in the high 20s until the market acclimates to higher interest rates.  That could be this week. At minimum, expect 1.5 to 2% moves per day for this week in the S&P 500.

 

Want more?

 

The rest of the Spy Master Dossier has been redacted – and is for members eyes only.

 

Two More Things

 

There are a couple of great (no cost) opportunities for Option Pit folks over the next few days.

 

• Trade the OPen on Wednesday with Mark, me and the rest of the OP Crew. It’s not a 2021 market anymore, but you can still thrive. We’ll show you what we’re trading, the tickers we like next and we’ll even give attendees an exclusive trade.

 

• Also, for the next three days, starting this morning at 10 a.m., you’ll have access to more than 30 sessions as part of the Synergy Traders Options/Currencies/Futures Trading 2022 Conference. The conference will cover some of the best advice on the topic of trading with a dedicated day on each of these 3 topics Options Trading (June 21), Currencies Trading (June 22) and Futures Trading (June 23). Reserve your conference spot now.

 

To Your Trading Success,

AG