Stocks cannot get enough all time highs

BY ANDREW GIOVINAZZI

July 11, 2024

Yo Pit Crazies,

My Weekly Profits Cycles just dropped a new trade on Wednesday. Folks keep calling for a correction but waiting for one will make you broke buying SPY puts. Learn to buy SPY puts and still make money in an up market.

Someone leaked the CPI number. I don’t know who it was but it is likely to come in line or maybe even a little hot. It does not matter as long as the vale of AI hangs over the market and shrouds the top 10 names from all forms of evil.

If you read this newsletter you will know VIX term signals matter to markets. It is the pro trader telling everyone what he thinks. I covered this in Weekly Profits Cycles today.

So I put on my most aggressive strategy to date.

A flat VIX term structure signals more SPX moves ahead

Oh you are a genius Andrew, the market it moves. The key here is stocks are likely to move more than the options imply. That is an edge to traders who want to make money today. We can sit and debate what 0 DTE options are doing to the market but they bring pricing anomalies we can exploit.

If short term IVs jump relative to back month IVs, that means the 0DTE crowd is buying options because they think stocks are going to move big. I only bought 1 VIX put versus a SPY strangle in my Weekly Profits Cycles because there is no edge in the VIX puts. But there is some edge in a 30 day SPY strangle when stocks move $10 per week in SPY.

The CPI will print today and unless the number is a disaster, any downtick will get bought. 5500 was just last week and we are already putting 5600 in the rearview mirror. I struck my Aug calls in SPY at 575. If the banks have decent earnings we will get on a new run.

To Your Trading Success,