Will this be the week that time forgot?

BY ANDREW GIOVINAZZI

September 13, 2024

Yo Pit Crazies,

So if you want to get in the habit of learning the Two Way Trading style, look no further than here.

You know that the Fed is going to talk about interest rates next week. The ECB is already cutting rates and did so again this week. Hey, do you remember the last time Europe created a company that was a top 20 or 50 in global market capitalization? Yeah me too.

Anyway, since Central Bankers are in cahoots trying to get us to a digital currency they can take away, I figure the Fed will have to cut rates too. The trend of Central Bankers trying to follow the same bad policy instead of individually finding better ones is a modern mystery. What all this does is place a “HOLD” on stocks. Until the Fed says something since that is where we find ourselves.

On a day with a very nice move up in SPX, about .75%, the VIX futures did not respond very well. I would have thought a bit more of a collapse but it did not happen. The Barclays Ipath short term VIX futures ETN (Ticker VXX) spent most of the day in the green with the market moving up. The VXX should have gotten smoked. Normally a .75% run in SPX would torch VXX.

My thesis is that the market is waiting for the news.

Is there a trade to wait for the news?

I think we will hit all time highs prior to the FOMC

What I set up this week are two way trades that do not cost as much as normal but will pay if we expect to have larger moves. I know it is crazy but that is the way it is because as option traders, we can manipulate price, time and volatility to suit our needs.

Right now I am using time to help because waiting for the Fed will likely put a floor under the market and then I will take what it gives me on the upside.

Don’t be surprised by new highs in the meantime.

To Your Trading Success,