Yo Pit Crazies,
The decent non-farm payroll report got stocks moving enough that the 3900 low from Thursday in the S&P 500 index (Ticker: SPX) became a 4000 high on Friday.
Then everything went to heck as the Russians turned off the Nord Stream 1 pipeline for “extended maintenance.”
To say this was not expected was an understatement.
The fact that the EU still believes they can sanction the Russians and still get natural gas in the winter defies belief, too.
Frank Gregory, Bill Griffo and myself believe you can’t go green without massive fossil fuels in the short term and nuclear energy in the long term.
Maybe the EU commissioners should read to Power Income and Power Moves!
The chart below of the SPDR S&P 500 Trust ETF (Ticker:SPY), the baby cousin of the SPX, tells the two day story..
The short answer is …
SPY Puts for A Zone 4 Market Are the Ticket
Now, you may wonder about the swings and cost of SPY puts.
They are not cheap, but can become quite cost effective using spreads.
The important thing is not to make too much out of the trade in a volatile market.
A Zone 4 market (about 24 VIX) is the highest volatility quartile and moves up and down.
On Thursday, in my SPYMaster Program, I had puts to close and pressed for more dollars only to close them on Friday.
Also, on Friday, I had VIX puts to close for money, which I did, and then could ride my SPY puts lower.
Mostly, the SPYMaster strategy is taking the gains the market gives – either up or down. I set up the trade ideas on Thursdays, given the unique conditions of the day.
Remember: In a choppy market, take what it gives, because tomorrow, like this past Thursday to Friday, things could look totally different.
I expect the new wrinkle by the Russians will keep markets volatile – but great conditions for SPYMaster.
The Rundown
Power Income Trader
Bill closed two trades on a wild Friday: The Invesco QQQ Trust (Ticker: QQQ) Sept. 9 296/294 put vertical spread closed for a 63% gain and the iShares France Index Trust (Ticker: EWQ) Aug19 31/29 & Sept. 16 32/30 put spreads closed for a 70% gain.
Vol Trade Club
Trade 306 – SPY Sept. 9 400/385/370 put fly & VIX Sep21 24 puts closed for a 12% gain
Trade 305 – VIX, SPY Sept. 7 23 puts & 410/400 put spread closed for a 7% gain
Pro Chat Room
A fun exchange from the Pro Chat Room on Friday …
Mark was in the Proshares UltraPro 2x long VIX futures ETF(Ticker: UVIX) calls for a .10 and closing them for .35 or a 250% return in 4 hrs.
To Your Trading Success,
AG