The Option Pit VIX Traffic Light Is Green: Volatility Is Likely To Stay Elevated.

Hey Traders,

On Friday things looked like they were going to go off the rails …

But the market managed to recover to “only” down 34 points.

We are in a bear market …

It seems like every Sunday futures react violently lower …

Then when the market opens, things seem to recover …

But at the same time … we keep getting weaker.

SPX keeps trying to break 4300, and keeps failing.

Here is the bad news for the longs … 4300 is going to break …

4200 might break as well …

In fact, I think we are going to see 4000.

Why?

Energy and food.

I'm sure you have heard about oil prices at this point, but have you heard what is happening in grains?

Here is a chart of oil (top) and wheat (bottom):

Wheat has actually been MORE parabolic than oil!

This is VERY BAD.

On top of this …

We have the Consumer Price Index (CPI) on Thursday and the next FOMC meeting next week, which is also VIX expiration (on a Tuesday) and Quadruple Witching!

We are – at a minimum – going to see some fireworks…

With VIX expiring soon, March VIX futures are going to increasingly act like the VIX index itself.

This is going to create some incredible trading opportunities both intra- and inter-day…

We are going to have a fresh trade in Vol Edge on Monday when I go live with my traders.

I can’t wait …

Your Only Option,

Mark Sebastian