Seeing Red
Hey Traders, I told you yesterday there was a good chance the Option Pit VIX Light would turn red … Well, it did. Remember, four sub-indicators inform the VIX Light. They are VIX Curve Formation, VIX Correlation, VIX Volatility and VIX Option Implied Volatility. Let’s see what they told us … […]
A VIX Light Change?
Hey Traders, Based on its sub-indicators, the Option Pit VIX Light should be red — meaning I see (or foresee) the VIX heading down and volatility dropping Almost all of the individual signals that recently went green (caused by the VIX shooting up and vol is spiking) have switched back to red … Of the […]
The Silver Squeeze on Vol
Hey Traders, There are VIX indexes for just about everything you can imagine. For silver, it’s VXSLV (which kind of sounds like a Super Bowl number). And it blew higher on Monday: 78% is incredibly high. The highest in three months, in fact. And while it’s not as high as during the VIX peak in […]
An Epic Overreaction!
Hey Traders, With the market down just over 3.5% between Jan. 26-29, the VIX is over 30. A 31% VIX means that the S&P 500 would need to move 2% daily to justify the current cost of the options in SPX. But the run up that led to the VIX into the 30s isn’t even […]
The VIX Light Has Changed from Red to Yellow
Hey Traders, We got an inkling that this could happen on Monday when one of Option Pit VIX Light sub-indicators started blinking yellow. While it turned off on Tuesday, I warned you that it was pretty darn close. I mentioned I liked long SPX, but also long VXX straddles, so that I would have a […]
YOLO driving The VIX Light to Yellow?
While the S&P 500 had a wild Monday morning, by the time I started writing this the SPX was only down about 8 points. Yet the VIX is near 25. Why? Well we have 2 markets: YOLO (you only live once stocks)….and everything else. While YOLO drives headlines, everything else is in fact, pretty darn […]
VIX Futures Are Heading for a Fall
For the first time in a long time, the VIX is starting to feel heavy… Like it WANTS to go down. On Thursday, the market had a nice mid-day dip … yet the VIX didn’t go crazy. When the S&P 500 went from up 10 (3860) to flat in the final minutes of the day, […]
BIG Money in a Few Minutes
First thing Wednesday morning I told you that the SPX Jan 20 straddle was too cheap ahead of Joe Biden’s inauguration. The straddle had closed Tuesday at $27. If someone was long that straddle, they had a pretty nice day, raking in a one-day return of 100%. While I did not have that particular straddle […]
Fall in Love With February Profits
Below is a three-month chart of the January Futures contract: I circled the spot where December rolled off and January became the front month (the month of the nearest expiration date) future: Notice what happened to the contract over the next three days … It died and went close to contract lows. The EXACT same […]
The VIX Curve is SUPER, SUPER FLAT
If you don’t know what a planking exercise looks like, here is a picture: Basically, the person exercising tries to make their body as flat as possible. So the VIX is, in fact, planking: From February through September there is almost NO difference in futures price. This is not unusual when we are in a […]