Yo Pit Crazies,
If you missed the rally on Friday, don’t worry there will be another one.
One of the leading indicators is turning bullish.
I won’t tell you which one right now, but it is kind of a big deal …
Let’s play Guess That Chart and see what next week brings.
And the chart is … ProShares Ultra VIX Short Term Futures ETF (Ticker: UVXY)!
UVXY Had an IV implosion
UVXY fell out of bed Friday. Not just the price of the shares but the volatility of volatility. (A long trade in UVXY is a bet the market will crash and volatility will rise.)
That means traders are no longer willing to pay for option prices.
As a matter of fact, traders sold volatility Friday as the buyers of panic options dried up.
UVXY three-week chart with one-day candles; 30-day IV in red on bottom chart
Vol Man is skipping from the low point in vol of vol to the new two low spots.
Even with the Standard and Poor’s 500 stock index (Ticker: SPX) much lower than a week ago, volatility in UVXY options are in the same place.
This is usually a signal the fed tightening vol event is over. I don’t think that means stocks are going to 4500, but there is no bid for more downside in SPX or upside in a vol product like UVXY.
Once again, expect UVXY to have a week weighted to the downside. The recent low is $14.
The Rundown
The Option Shopper
Licia hit a gusher, closing oilfield services company Schlumberger NV (Ticker: SLB) calls for a 39%% gain.
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Cat squeaked out a RIOT Blockchain Inc (Ticker: RIOT) win.
To Your Trading Success,
AG