BY MARK SEBASTIAN
March 12, 2025
Hey Traders,
If you believe the alarmist, we are all going to be eating in soup kitchens soon.
I’m not so sure that’s coming our way.
The government currently represents about 25% of the US GDP – up from the traditional 20ish that it ran historically.
Removing that growth engine (expanded government) is going to cause some near term waves.
However …
There are currently millions of open positions floating around out there. If you are an optimist, there are talented people working in the government, and when they enter the private sector they will be in demand.
If you are a pessimist, these people are leeches and have little use outside of the government.
If you believe in the former, then the price action from Tuesday could be bottom forming.
The S&P 500 came within a hair of down a full 10%. We still might get there yet, but as we are potentially bottoming here, what sign are we looking for?
The answer: VIX down on an S&P 500 down day.
Even if it’s still, appearing to be trending higher is a green shoot.
However, with the current structure of the market, we are primed for one big flush first. We haven’t had the big spike that goes with the swell in the VIX we have seen.
What these two charts show you is the value of Two-Way Trades – the best active strategy to run in this market right now. Learn all about it by joining Hannah and Andrew tonight at 7 p.m. ET.
Let’s Recap Yesterday’s Trade
We made no 0DTE trade on Tuesday …
But we did do a super overnight. Yes, there is a chance that – as I stated above – we are witnessing green shoots in the market.
The downside though?
5410 and then 5125.
I have set us up in the case that we hit my first target – something I believe is entirely possible. Given the risk reward on the trade, it’s 100% worth the trade.
…Today’s Outlook
We have CPI in the AM – that is going to set the tone.
A move higher, we could run today. If we miss, maybe that’s the capitulation I believe the market needs.
Be ready.
Call Ted if you aren’t currently a member – 888 872 3301.
Your Only Option,
Mark Sebastian
Mark Sebastian
Founder & CEO, Option Pit
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