Yo, Pit Crazies,
But do read on, too!
Stocks are looking higher once again as the fix seems to be in.
That fix is that the Federal Reserve will raise rates in harmony with other G7 countries.
Seems the market knows this, needs this, and likes this Friday morning.
So what is the trading opportunity?
VIX IS NEAR ZONE 4
And in contango, to boot.
The Sept. VIX future was very tight to the VIX cash going into the close Thursday.
A tight short-term VIX future usually signals a bigger change in VIX.
It is not often news is out – as in, the Fed shows its hand – and VIX is still this high.
Market sentiment and liquidity is so bad that it is very easy for SPY to move a little higher and VIX to drop at this point.
VIX can go a long way down once the market accepts rate rises are here to stay.
And that is what I predict will happen.
I am not seeing a ton of upside for SPY because there are still headwinds, but VIX can drop 5 or 6 points in the next month which could be huge for that product.
And this is all set to happen within the next two weeks.
It’s an opportunity for traders to 2x or 3x their trading investments.
But the clock is ticking.
The trade is ripe right now – but by EOD today, and certainly by the close Monday, the ship will have sailed.
To Your Trading Success,
AG