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? Next Monday.

This week flipped on us fast. We started last Sunday with stocks selling off hard, and by midweek everything looked fine again. To understand what's really happening, look at how markets are pricing short-term trades.

It’s All in the Range

The daily range is how much the S&P 500 Trust ETF (SPY) moves from top to bottom in one trading day.

Traders price options based on what they think that range will be, on average, over a set period. They'll then price slightly higher or lower depending on their needs.

SPY 5 Day chart

Here's the key: that time period is getting shorter.

With weekly and daily options, those time windows can be less than 24 hours.

With 0DTE options (contracts that expire the same day you buy them), we're talking minutes.

Right now the market rewards trades I can close fast. That's not always the case.

Picking Your Timeframe

Across my services, I'm shortening the holding period on trades I put on.

In Weekly Profit Cycles, the idea is a two percent move in 30 days. We're getting those moves in half a day now. The S&P has been posting dramatic intraday swings all month. Investors keep flipping between hoping the Iran conflict ends quickly and fearing oil stays locked above $100

This morning I was putting out closing instructions when the market reversed a full 1.5 percent move in minutes.

I'll get another shot next week. Volatility like this doesn't last forever. When the Strait of Hormuz situation resolves, those fat daily ranges will compress and I'll stretch my timeframes back out.

Until the Iran conflict is behind us, all my Weekly Profit Cycle timeframes will shrink. The war has oil above $100 a barrel and the Fed boxed in. That means violent intraday swings, and shorter trades let me capture those moves without holding through the chaos.

This is where having different holding periods helps.

I'm much longer term in the Ceres Club (my investment-focused service for bigger-picture positions). Missing a close there isn't a big deal. The longer timeframe lets me invest instead of just trade.

To get follow up intel and more, check out the Ceres Club at this link.

To Your Trading Success,

AG