BY ANDREW GIOVINAZZI
June 11, 2024
Yo Pit Crazies,
I did have a nice session in OP Mentoring/Pro today about pricing out the holiday coming on June 19th. The Fed moved their normal meeting time up a week to give us the one-two punch of CPI and FOMC minutes this Wednesday.
This does set up a nice potential trade and some new levels for the SPX this week. Nvidia Inc (Ticker: NVDA) managed an up day after the split which i thought was surprising. Profit taking, that is for the other guy.
My favorite indicator is back in action this week. It is at the lowest level of the year going into an FOMC event, let alone a 2fer like CPI/FOMC.
Click on through and see what to make of it.
VIX9D is showing a premium again
Why do I look at volatility you ask? Well besides the 35 years I have been looking at it, it is still the most consistent signal I know of. When will the market move? Usually when the short term IV is higher than the long term IV. I learned that very early in Gulf War I in 1991. The vol skew between terms before the war was crazy. Traders loved the front month and bid it up. They did not bid it up enough because the SPX and most stock raced past how the market was pricing the move.
Now I have 9 Day VIX to simplify into one indicator with VIX 30 day (normal VIX). IV 9 day VIX is greater, I expect SPX to outpace the straddle in the short term. That is what we have today
As I can see from the snap above, it is only a little bit, but that is enough.
My guess is that the Fed does nothing, inflation is just hot enough to keep rates high and we ride the wave of AI to 5400 SPX.
So goes another week of trading.
To Your Trading Success,
-AG
Andrew Giovinazzi
30-Year Trading Pro
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain