Yo, Pit Crazies,
Some thoughts on Wednesday before Thanksgiving …
- Yesterday was your average low-volume rally in the S&P 500.
Oils rallied, commodities rallied and even tech rallied.
Junk stocks are still junk.
Saudi Arabia celebrated President Biden’s gift of immunity to Crown Prince Mohammed bin Salman by beating Argentina in the World Cup.
Anything can happen.
- Here’s an unpopular opinion.
The biggest loser in the Fed’s rate hike gambit is the US government.
Social Security payouts jumped, debt service jumped and all the insane spending is going to come with a huge cost.
Maybe that was J-Pow’s plan all along. Since Congress won’t stop spending, he will make them stop.
- 1999 was a great year. A mortgage was 7% or higher. Who has been buying real estate for the last 2 years? Funds and Blackrock types.
The wildcards are still the same.
Ukraine, Inflation, Supply Chain, China COVID Demand …
Each of these issues appear to be improving but we are still not at the all-clear stage.
Why?
VIX is still way above long-term averages.
You know what the VIX mean is? 12.
Yes, there are more samples in the 12 handle than any other.
For this year, 20 VIX is the low. That means any of these witches’ brew of problems are still brewing and causing investors fits. Traders love it because the market goes up and down like a beautiful wave.
This VIX curve is the best area to short SPX or the Standard and Poor’s 500 trust (Ticker: SPY) and short VIX. I do it via puts and puts.
That is what I do in SPYMaster when this condition exists.
If you want to see it happen, next week I will take the cover off and show you.
Have a Happy Thanksgiving!
To Your Trading Success,
AG