Yo Pit Crazies,
There is so much ridiculous headline news that I can barley fit it all in one spot.
The G7 is trying to make it difficult for Russia to do business anywhere on the planet.
Yet the EU is still buying gas and oil from the Russians.
This has all the makings of a long, painful stalemate.
Meanwhile, the Fed is supposed to raise rates on March 16.
What a Macro Witches Brew … so what should we make?
What Does the Market Love?
In this Witches Brew of a stock market, there is big love for alternative energy in the likes of solar, nuclear and battery powered vehicles.
Keep in mind that VIX is the 30s, but the S&P 500 had a very light close on Monday, only down .43%. Most of that IV in SPX is on what could happen.
Apparently the race for new energy is getting some life now that Putin can cut off 50% of the EU’s energy supply. The fact that the USA was until recently willing and happy to provide said energy is besides the point.
Below is one of the stocks I follow, the Guggenheim Solar Trust ETF (Ticker: TAN). Note the massive bullish candles below. I think it would make a great long strangle candidate for Capitol Gains.
TAN six month chart with 1 day candles and Vol Man rising the realized vol higher
Right now, money wants the next big thing – which happens to be the old next thing (solar).
Stocks are so illiquid that I think TAN can get to the high 70s in a jiffy.
Look for a Cap Gains trade this morning
The Rundown
Capitol Gains w/ Frank Gregory
I am looking at TAN for this week as Enphase Energy Inc (Ticker: ENPH) blasted off already and is in the TAN ETF.
Power Income Trader
Bill and I are long the Northshore Global Uranium Trust ETF (Ticker: URNM) and it is almost to the short strike of my call butterfly. His Palantir Technologies Inc. play (Ticker: PLTR) is up around 10%
Option Shopper
Licia Leslie is shopping for QuantumScape Corp (Ticker: QS) calls.
Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.
The Pro Room had a great call with the counter trade in Ark Innovation ETF (Ticker: ARKK)
Ed G had the ball:
Big Money Flow
Each week, Option Pit CEO Mark Sebastian looks at size institutional option buying with a twist. He mostly buys calls or puts to ride the large momentum trades.
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- Mark flowed out of some iron ore in Cleveland Cliffs LLC (Ticker: CLF) calls for a 50% gain. Commodities are as hot as Solar stocks these days.
Volatility Edge & Volatility Trading Club:
Volatility Edge is run by Mark and uses the proprietary Option Pit VIX Light indicator to guide volatility trading. The Vol Trade Club is run by me (AG), and employs a long strangle strategy that seeks to use VIX future decay to pay for upside Cboe Volatility Index VIX, iPath Series B S&P 500 VIX Short Term Futures ETN (VXX) and ProShares Ultra S&P Short Term VIX Futures ETN (UVXY) options.
The Option Pit VIX Light Is Green, as the market for VIX futures is in full backwardation. SPX is barely moving, so the overnight risk is crazy now.
In the Volatility Edge, Mark bought VIX call spreads in the March 15 cycle.
Remember, a lot of vol strategies I use are market neutral. That means whether SPX or VIX go up or down, the positions still make money. This is a technique you can learn in the Volatility Trading Club and Volatility Edge!
To Your Trading Success,
AG