Are We Past The Peak Of Fear?

Mark Sebastian

The VIX Light is Yellow: Volatility Is Going To Move Wildly.

Hey Traders,

The S&P 500 (Ticker: SPX) had a strong day on Wednesday.

On Thursday, it opened lower …

But as we head into Triple Witching I am noticing a trend this week in the VIX.

What does it mean? Where are we going next?

Here are your answers …

Headed For A Reversal?

The S&P 500 is down about 20 points as I write this…

The VIX is only up about 0.57 …

As for VIX ETPs and VIX futures … they are barely moving.

What is going on?

Let’s look at the S&P 500 and the VIX:

As you can see, even as the S&P 500 has been flailing over the last few days, the VIX is well off its top.

I think we are past the peak of fear …

As we head into Triple (or Quad) Witching on Friday, we are setting up for a big reversal.

I would not be surprised if the market rallies throughout the rest of the day with potential follow-through tomorrow.

I’m looking at cheap SPY calls that expire tomorrow. I am also looking at VIX and ProShares Ultra VIX Short Term Futures ETF (Ticker: UVXY) as potential volatility fades.

Your Only Option,

Mark Sebastian

VIX Edge

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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