Yo, Pit Crazies,

The Cboe Volatility Index (Ticker: VIX) almost made it to 27 yesterday.

Does that have any significance at all for the market in general?

I would say VIX up and the Standard and Poor’s 500 Index down is a normal condition.

The question is … How should you trade it?

There Is Correlation and Causation with VIX and SPX

When the SPX drops, VIX usually rallies.

Remember that the VIX prices off of SPX options.

By the time I am talking about VIX options they are a derivative of a derivative of a derivative.

Holy smokes!

That is why I have my SPYMaster program – it’s all about trading this crazy, high-volatility market.

SPX is mostly negatively correlated with VIX, but SPX moves cause VIX to move.

Join me Thursday and I’ll show you why this represents the biggest trading opportunity of 2022.

And remember … Trade for what you see, hedge for what you don’t expect.

I’m expecting a choppy market at least until the next CPI number.

The Russian gas withdrawal is only adding, dare I say it, fuel the fire.

The Rundown

Capitol Gains

Friff, Frank and I racked up a 21% gain in Cliffs Natural Resources (Ticker: CLF) and an Intel Corp (Ticker: INTC) put fly.  I still like CLF for a longer hold, but the market looks too ugly right now.

SPYMaster

I closed out a SPY Put Spread and VIX put today for a 14% gain, with almost no market direction risk.  I could hold the VIX put to expiration, but VIX has not been too kind on the downside lately. That is the beauty of the system since holding for a home run is always possible.

To Your Trading Success,

AG