Payrolls Jump and so does Volatility

While October payrolls increased 531,000 versus an estimate of 450,000, per yesterday’s jobs report, the more important number to note is the VIX.


The S&P 500's correlation with the VIX hit its highest level in 15-months this week. 


However, after the post-Fed vol crash, the VIX (+3%) and SPX (0.5%) ended up in the green on Friday. 


Today we will look at the warning signs and what we can expect next week …


That includes my major event Tuesday night at 8 p.m. EST. I’ll show you exactly how I’m trading the Fed and inflation for huge profit — and how you can, too.


Plus you’ll get a free gift just for registering — and receive an exclusive inflation trade when you attend!


On to the week ahead!


Is the S&P 500/Vix Divergence a Sign of Looming Correction? 


It is incredibly interesting that on Thursday the VIX volatility index was up $1 while the S&P 500 was hitting a new all-time high. 


There aren’t many times this has happened in the past but when it does the S&P usually corrects.



Good Low Risk / High Reward Trade


The nice thing about a setup like this is you risk little by being long when the Vix is low. 


The VIX may grind higher in the short-term while the S&P trades sideways, but if the S&P rolls over you will get a nice spike in the VIX and capture a great return. 


VIX Trade

Here is a great Risk/Reward trade for the VIX:


  • BTO $VIX Nov17 18/19 call spread for $.34



Bring It Home


Divergences of highly correlated pairs can be a valuable trigger for profitable trades. 


I will put a portion of what I am comfortable with and if the infrastructure spending bill is passed I will add.


Then I’ll let the market do what it does.


Have a great weekend — and be sure to register for my event this Tuesday at 8 p.m. EST.


Until then …


Live and Trade With Passion My Friends,


Griff


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