Yo Pit Crazies,
Right now the market is waiting for a couple things:
- Progress on the Debt Ceiling
- Another bank to fail or not fail
- If the Fed will stop raising rates
The fact that these are all related is not lost on traders. I can recall the market pulling back liquidity when it’s waiting for a direction. If the Congress can stop spending, the Fed will stop raising, and banks will stop failing.
It’s hard to believe that it’s that simple, but a lot of problems have simple solutions. I saw this quote from Eddy Elfenbein on TWTR:
In 28 of the last 31 days, the SPX has not closed more than 1% away from 4130.
SPX 30 day chart with 1 min candles
There is some trading opportunity …
30 Day Implied Volatility Is At Year Lows
Just because IV is at lows doesn’t mean you should buy it. After all, the stock market is not moving much as it “waits” for news to come out. The big cost is time decay, so if I can figure out a way to beat time decay, I can wait with the market.
In the Trading Desk and Easy Button today I will look for ways to beat time decay. Generally after the market sits like this, stocks rally if history is any guide.
There’s a pot of undervalued stocks I like and he has some good ideas for me.
To Your Trading Success,
AG