Yo Pit Crazies,
If you were surprised by this weeks near 7.6% SPX range …
It is clear you did not read any of my commentaries all week!
Near-term options were pricing huge volatility at the beginning of the week and ratcheted that number down bigly by Friday.
For traders, that is a volatility condition.
Below, Vol Man has his bow and arrow set, but where are we launching?
There is an easy way to tell …
Find Where We Are on the Vol Curve
Looking above, it is clear SPX is making new lows, but implied vol is not making new highs.
If I am looking on my Easy Button Condition Map (aka my Edge Hunter Curve), SPY index Time Spreads (TS) should play well here …
What I see is IV making relative lows with stocks looking terrible. I circled the area on the EH Curve to highlight what kind of trade should work best, that would be time spreads.
If this is how we trade Monday, this will be my first Easy Button trade for the new cycle.
If you’re not a member (or a Pro student) already, get in for just $47 per week.
The Rundown
Vol Trade Club
SPDR S&P 500 Trust ETF (Ticker: SPY) Jan.20 395/380 put vertical and ProShares Short VIX Short Term ETF (Ticker: SVXY) 58 calls closed for a 46% gain. Running five wins in a row here.
SPYMaster
Working 11 wins in a row with my 12th currently profitable. Lots of ways to use a conditional strategy, so sign up here.
To Your Trading Success,
AG