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If you want to understand what is happening in the market right now, keep reading.
The Fed is perceived to be out of the boosting game. Fifteen years, trillions of dollars of deficit spending and low rates … and all the Fed can do now is give up.
2002 was the last year of fiscal sanity – and that was 19 years ago!
In 2009, we got a $700 billion “temporary” increase that has never gone away.
Will the Fed finally end the shenanigans? May 4 looms for a clue but anyone can see stock prices and know what the answer is.
Find out here.
The Fed Is Out of Bullets
The easiest thing about a date on the calendar is that it is set in stone.
The Federal Open Market Committee (FOMC) will speak come May 4 and the pressure builting up to that date will be intense.
Stocks have taken a hard turn as one Fed governor after another has pointed to rising rates and monetary tightening.
Vol Man is seeing a rising VIX and VVIX, aka the vol of VIX.
You can see in the VIX chart above that the bid has been steady and fierce with IV in VIX hitting a peak yesterday.
The vol market is taking this Fed announcement hard right now and, as of Tuesday, showed no signs of slowing down.
I like the idea of riding VIX up to May 4 and closing my long contracts prior to that date.
This is one of the rare times VIX might hold a bid into a Fed announcement.
Rising VVIX is still a tell when the market is unsettled and I will most likely look at the short side of VIX if VVIX starts to subside.
The Rundown
Capitol Gains w/ Frank Gregory
I closed some QuantumScape Inc (Ticker: QS) strangles for a 7% gain. I sold some puts against the strangle thinking I would ride the trade through earnings, but thought better of it and just took the dollars the market gave me.
Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.
I added this trade into backwardation:
Vol Trade Club
I closed all of my Proshares Ultra VIX Short Term ETF (Ticker: UVXY) call spreads leaving me with a 20% gain and put for a credit that I can ride to Mayn20.
To Your Trading Success,
AG
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