The Option Pit VIX Traffic Light Is Yellow: Volatility is likely to move wildly.

Monday was completely an inside day for the market…

The S&P 500 closed up .37%, the NDX down .25%

But intraday there were some moves!!! Led by the RUT…

The early morning selling was nasty with the RUT dropping more than 1% from top-to-bottom in a matter of minutes.

Throughout the rest of the day, a slow relentless rally.

The shorts failed …

The VIX fell .15 points on a Monday, meaning volatility really took it on the chin.

The VIX futures fell pretty darn hard, too, closing down to 20.40.

The spread is still normal between cash and the VIX – but barely

At 1.85 points with two weeks to go, the VIX futures are saying VIX itself might be a little oversold.

Near-dated options on the SPX are pricing little movement during this shortened week.

I think they are wrong.

The April 6 4120 straddle is only pricing in about 43 points of movement for Tuesday,  Wednesday and Thursday…

We moved more than that on Friday!

I am a buyer.

Questions about that? Comment below!

Your Only Option,

Mark Sebastian