Big Bank Earnings Today

 

Yo Pit Crazies,

 

The markets will surprise you.

 

Most folks did not think the S&P 500 would make recent highs in early April after the bank near-collapse in early March.

 

Understanding how to make two-way trades that help in up or down markets is what OP Mentoring and Pro are for …

 

Vol Man has been riding the top crest of VIX for the last couple of weeks, with the index testing 20 and never breaking above it. Now we have new year-lows and the 17 handle for VIX. It’s Zone 2 (13-17) for the first time since the beginning of 2022.

 

VIX 30-Day Chart with One-Day Candles

 

VIX making 30-day lows the day before big banks report earnings is somewhat ironic. After all, banks were creating a mess just a few weeks ago.

 

What is different this week?

Economic Data and QE Are Pulling in the Right Direction

The one-year low for VIX was 17.01 and it happened on Feb. 2, right at the point where traders were convinced the Fed was going to stop raising rates.

 

If anything, the market is accepting slower rate rises and, as I said here yesterday, I think they would grind higher.

 

Voila!

 

They did and if VIX keeps dropping, we will see the same today and next week. The problem after Feb. 2 is the VIX did not hold the lower levels. The upward moves in SPX were too severe and VIX got to 30 again in a month.

 

VIX Two-Year Chart with One-Day Candles

 

Today is a pivotal day in my view. If VIX can hold at these levels or drop a bit the market is getting into a new cycle.  The SPX slowly grinds up as businesses get used to making money in a 5% rate environment. They did it prior to 2007 and they can do it again.

 

The Rundown: A Very Busy Couple of Days

Win the Week

SPX Apr12 4160/4165 call vertical spread closed for a 100% return on credit.

SPDR Gold Trust (Ticker: GLD) Apr14 183/182 put vertical spread closed for a 8% gain.

Power Income Trader

GLD Apr21 186.5/185.5 put vertical spread closed for a 36% gain.

Option Shopper

US Oil Trust ETF (Ticker: USO) Apr14 71.5 calls closed for a 60% gain.

Alcoa Corp (Ticker: AA) Apr14 40 calls closed for a 76% gain.

Intel Corp (Ticker: INTC) Apr14 32.5 puts closed for a 4% gain.

Big Money Shopper

iShares Silver Trust (Ticker: SLV) Apr28 23 calls closed for a 69% gain.

Nitro Trader

SPDR S&P 500 Trust iPath S&P 500 VIX Short Term Future ETF (Ticker: VXX) Apr28 405/390/375 put fly, 44.5 puts closed for a 14% gain.

Capitol Gains

SPX Apr12 4160/4165 call vertical spread closed for a 100% return on credit.

 

To Your Trading Success,

 

AG