Yo Pit Crazies,
Yesterday, I told you that the VIX Oct 19 27 straddle was the cheapest ever.
Well the S&P 500 was up 1%, even, up 1%, and finished down 1.5% on the day or a 5.5% range on the day of all swings combined.
SPX one-day chart with one-minute candles.
Every time the market thinks Powell is going to go soft, he does not in these FOMC announcements.
He got downright ornery yesterday.
No cuts this year and likely not next year.
Nothing Happened to My VIX strangle
That is not exactly true, it went up a bit to close to $5.15. VIX was up on the day into the close as the market made a one-month low today.
The straddle avoided a day of decay, even with the Fed news out. That is not good for stocks if volatility keeps a bid after the news is over.
We have not seen this number since mid-July for SPX. This is the part of the story where anything can happen. I think traders were taken by surprise and sold VIX IV into the hole.
Today could be messy as stocks get untethered for a while from the solid wall of support from the Fed. This has been a co-dependent relationship and J-Pow seems set on ending it.
In OP Mentoring I bought a VIX strangle. Today, I might be selling the call leg much to my surprise.
The Rundown
Big Money Flow
Mark and I dumped half of our Coty Inc (Ticker: COTY) calls for 80% gains and kept the rest for free. COTY was flagged in Big Money Flow and near the only stock up on the day by the close. Go with the flow!
To Your Trading Success,
AG