BY MARK SEBASTIAN
March 5, 2025
Hey Traders,
Another day, another 3% mover.
And with last night’s State of the Union address, I expect we could see more.
We could see the market make a wicked turnaround …
Or we could see the market continue its malaiseful path lower.
Malaisefull? What do you mean by that?
Well, the S&P 500 is down nearly 400 points – good for about 7% over the course of the last nine days. Notably, the last four have been wild.
Yet, VIX closed at 23.5! That implies a move of about 1.5% a day – not exactly sky high.
With where the curve is, we could still see an epic volatility collapse … or a complete explosion.
The VIX curve points toward the latter – the bond market, the former.
The best approach is a Game Plan. Learn about yours by joining Hannah and Voz today at 10 a.m. ET right here.
First, Let’s Recap Yesterday’s Trade
I put out a trade on Tuesday.
But there was no trade.
If you are new, this is something to note. When it takes too long to fill a trade, or a trade gets away from you … stop trying to buy or sell it.
I put out my trade here:
Notice what happened after I put the trade out: the index went straight up, to the point that the fly was worth almost what I would want to sell my trade for.
At that point, I stopped bidding.
When a trade gets away, quit – because you might not WANT to get filled when it turns back around. And that’s exactly what happened.
Is there any hope for today?
…Today’s Outlook
We could go in either direction.
Futures are up big prior to the SOTU. We will have to see in the morning.
Here are the bounce levels I am watching though.
On the downside, look for resistance at 5725.
On the upside, the 100 DMA is at 5820 and the 100 is up at 5954.
Despite the doom and gloom, I believe the price action on Tuesday might point toward the market trying to find a way out of all of this.
We might be up big today.
Call Ted if you aren’t currently a member – 888 872 3301.
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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