We’ve been racking up the gains over here at Option Pit across our amazing options trading services. Almost just as much as making money, I love teaching others my exact game plan. I recently did that at my Conquering Uncertainty event I was asked to speak at. Stay tuned because I’m gonna let you in AAANDDD give you a surprise.
If you are feeling like Thursday’s price action was bullish for the market…
You might want to think again.
When Volatility rises, one expects it to be on selloffs.
Usually that is the case.
From day to day, we can see occurrences where the market is up with volatility also up.
But generally speaking, volatility is more subtle.
We see the VIX rally hard on the days when the market sells off.
ON days we rally the VIX backs off…
but, may not as much compared to sell off days.
Here’s the thing:
Over a period of days and weeks, if we see the market up and volatility up, then:
This is almost universally bearish.
Sometimes it just means the market slows down.
But there are times when it leads to a serious sell off.
Take a look at the QQQ over the last month:
The VIX Traffic Light is Yellow
P.S. – With my VIX traffic light at yellow and the Fed restricting banks now…stay frosty!