Yo Pit Crazies,

For all of my new subscribers to Market Action, welcome. What I do here almost every day is find a misunderstood part of the volatility and equity markets and use it to figure out what I want to do tomorrow.

That tomorrow will be Wednesday of course. Stay till the end, because I have a solid way to trade this market.

For right now, it's trading like I've posted below: a 26 VIX that produced a close-to-close move of five dollars for the S&P 500 (SPX). That's less than .10 percent on the day. We should have seen 100 points from the close, at least.

SPY 5 Day chart

If this high volatility, go-nowhere market has you down, see what 3 Days of the Voz looks like here.

The issue is we have an odd situation to say the least. Every day we just wait for the next bit of crazy news. Let's survey the landscape.

Trump is out there with civilization threats and meanwhile, Kharg Island is getting lit up. Pakistan is taking the Saudi side and putting another nuclear piece on the table. Both Israel and the USA claim Iran was close to creating a nuclear weapon.

Iran said no, but they weren't supposed to have long-range ballistic missiles either. Iran is still launching attacks on civilian centers with relatively little condemnation. So far USA and allied attacks have kept to military targets.

No war was ever won by aerial assault alone. Somewhere, somehow things will move to the ground.

When the Playbook Doesn't Exist

One of the better unorthodox solutions is happening as we speak: see what 3 Days of the Voz looks like here.

I'd have to guess what's happening right now in the Persian Gulf is not a surprise in the White House. None of this was going to be easy.

I saw reports of rich nepobabies from the current Iranian elite getting deported. How are nieces of Iranian generals living in the USA? Relatives of the Shah and his ruling counsel I can see, but current relatives of Iranian leadership in the USA? That's just plain nuts.

If the Trump administration is correct, this is solving what would have been a bigger problem down the road. This road is still going to be long. Sitting on pins and needles all day waiting for the next announcement will be the new normal.

The Trade: Fade the Noise

I think you position long into the selloffs and position short into the rallies until there's a tone change. My conviction on this: we'll see that shift when ownership of the Strait of Hormuz changes hands and the USA is ready. Every day that gets closer.

Hopefully this was helpful.

AG