The Option Pit VIX Light Is Yellow: Volatility Is Going To Move Wildly.
Well that did NOT last long.
As I stated yesterday, the light was barely in red territory as it was.
And now, one of my indicators is essentially about to flip to green!
There’s so much noise out there, it can be hard to sort through what matters, and what doesn’t.
Luckily, that’s what my Option Pit VIX Traffic Light is for … and why we use the four indicators.
It also helps that I have a guy like Frank Gregory around to help “cut through the noise” when I need him. He’ll tell you how he’s able to do just that to find the trades other people miss during our presentation tomorrow night — you’re coming, right?
Here is the story I’m seeing right now …
There are so many crazy macro things going on right now …
China … inflation …
Plus, we have mega cap earnings all week!
Yet … we’re only 20 points away from an all-time high in the market.
But with all this macro risk, one of my indicators has flipped from red/yellow to essentially green.
Take a look at the relationship between the VIX and the S&P 500 (Ticker: SPX) …
Yes, some of the drive up in VIX is probably related to earnings …
But in the last month, the S&P 500 is up about 50 points, and the VIX is up 3!
At this point, I am going to be looking to find some strangle/straddle type of plays in VIX …
Likely long puts in ProShares Ultra VIX Short Term Futures ETF (Ticker: UVXY) vs a long call spread in VIX.
There is just way too much macro noise to put all my eggs in one basket.
But like I said, it’s nice having my indicators, and a guy like Frank around who knows how to filter through the news and political noise to pull out the nuggets of what actually matters. He’ll talk about how he’s able to use this in his trading tomorrow night, so if you want to learn how he does it, you can click here sign up!
Your Only Option,