Yo Pit Crazies,

Conditional trading is finding the right position to fit the current market conditions. 

Think of it as “give me a reason to make this trade.”

Every service at Option Pit fits that description. 

Set up the trade, price it out, run the trade.

My Easy Button takes all the work out of it and produces the trade for you.

Check out the SPX chart below. I am reminded of the “one of these things is not like the other” rhymes when teaching my kids about shapes about a million years ago. It works for market conditions, too.

SPX 10 day chart with one-minute candles

The times they are a changin’.

The Market Is Expecting Inflation Will Be With Us This Year

A 20 VIX does not go with a market move of .30% per day, or a 13.1% realized vol in SPX. Traders are still looking backward and seeing volatility from the last week.

The sad truth I realized is investors keep piling too hard on every snippet of good inflation news only to be crushed by another poor report.

The imperfect cycle of bringing the price level down is not sitting well. QE for 10 years taught this generation of traders to be spoiled. That party is over now and things will stay choppy

Just two weeks ago I was ready for a lift as inflation expectations seemed chilled and the Fed slowed the pace of rate hikes. That was very bullish.

Then, St. Louis Fed president Jim Bullard pulled out the cold water and wet blankets and smothered stocks. That is where we sit.

I remember a lot of cycles like this throughout my career where some stocks will do really well. Bill, Frank and I are focusing on demand for EV vehicles and commodities in Capitol Gains.

The conditions we have are muted overall. More income-style trades like Iron Condors on indexes and credit spread/calendar strategies in equities.

Those are the conditions we have – and those are what the Easy Button serve up.

New trade ideas will be out this week. – AG