2024 came undone in 1 week

Daily Pit Stop [fstp, logo, header] April 21, 2024 [volman, vol man, vol,] 2024 came undone in 1 week Hey OP Crew, AG’s alter-ego Vol Man here with my weekly analysis. As usual, I will start with my last forecast… [vol] [If some of my Option Volatility Jargon is vexing, our Glossary is here.]( Last Week:  VIX did not stay in Zone 3. That does lead me to believe that the move was algo driven by panic on what could be a very sad Geopolitical moment in the Middle East. I do think the Thursday rally with VIX drop was the way the market wanted to head. However, a backward VIX close is always cause for concern, even a small one. I don’t buy more VIX puts in backwardation or any vol products until VIX drops out of backwardation.  I do see a more volatile week for SPX as the geopolitical risk goes nuts with potential for limit down days. Expect a very illiquid market and VIX to 25 or more. A few prayers would not hurt either. The worst fears were not realized when I wrote that last week as Israel was effective with the Iron Dome defense. The Israeli counter attack which the market was waiting for all week crushed SPX futures (Ticker: /ES) down to 4960 overnight Thursday, which is where we ended up Friday at the close. It would seem the market has absorbed the crises that started brewing in Oct. For now. However the two things the market lived on for 6 months came crashing to the floor, AI earnings largess and rate drop hopes. Nvidia Inc (Ticker: NVDA) is now down $200 from its recent highs to a more respectable multiple as is just about every chip stock. ASML holdings (Ticker: ASML) is down 50% from its highs. Just like that with any whiff of disappointment, down goes Frazier. [vol] SPX daily price action over the last 30 days SPX is down 5% from the highs and this is the most orderly selloff I have seen in a while. The overnight future market was very accurate and for now any rally is sold but the change in tone from just last week is measurable. We went from buy every dip to sell every rally. [vol] SPX sigma (Vol per term average) levels over the last 30 days. Sigma Vols closed at one month highs again so VIX is moving higher and all implied volatility measures are moving higher into the close Friday. At least going into the weekend, the bid for options was as high as when folks were worried about WWIII. The 10-day realized vol is down to 10.73. That’s right, a 5% selloff from last week and realized vol is lower. SPX rallies .5% then drops .75% every day and that is realized volatility destruction. That is nowhere near a panic selloff. [vol] SPX realized volatility snap on Apr 19 2024 VIX ZONE 1 9-13 VIX ZONE 2 13.01 TO 17.99 VIX ZONE 3 18-23.99 VIX ZONE 4 24< The front end of the curve went extra backward toward the end of the week but still in an overall contango shape. Traders are bidding the implied volatility up but nowhere near nosebleed yet. Not even close. The market for volatility is still in the orbiting expectation for SPX. A little up and a little down. [vol] Closing VIX curve, Apr 12, 2024 in purple With stocks down 5% from last week, the VIX curve is just fractionaly higher. Mostly in the front end expectation but only a point. [vol] Closing VIX cash and curve, Apr 19, 2024 Basic Vol 101 on our [Option Pit YouTube channel](. [vol] VIX 30 day chart with 1 min candles VIX closed in Zone 3 but did not hold new highs. This is a healthy selloff for now but setting up for a market that is more back and forth. IV is skyhigh relative to underlying close to close volatility so making money buying options in SPX will be a lot more difficult. Big index trades I will need to take smaller profits fast and it is a lot more work. I expect the same for SPX this week with back and forth trading. The easy run up is done for a while with tech getting smoked. A pullback is healthy after a wild 6 month run up and traders took stocks down quickly that had run up. Now I need to see and the market needs to see good tech earnings at the end of Apr and into May. The low realized volatility to me means stocks will keep the same pattern until the earnings picture adds the good news traders need. The bigger item is the low realized vol and the flatter VIX curve means VIX can get smoked easily on the whiff of a sentiment change. I don't think it will happen this week. I a holding a lot of VIX puts in Weekly Profit Cycles and it looks like I will need another week at least before they turn green. [Weekly Profit Cycles is opening for a quarterly subscription if you want to learn to trade VIX/SPY exclusively. The last 11 Opens in WPC have been nice win]( s so getting paid to own SPY puts in an up market is something anyone can learn to do, Let’s Go - VOL MAN  [logo, pit profits] Want to find YOUR winning fit? Give our Customer Care Team a call at [1-888-872-3301](tel:/1-888-872-3301) Monday-Friday from 9 a.m. - 5 p.m. EST. Or email them anytime at [support@optionpit.com](mailto:/support@optionpit.com)  [logo, fvix, header,] VIX Says More Pain Incoming For The Nasdaq Hey Traders, In today's video, we'll cover: - Stocks that i could see making a big rebound - My 5 Stock watchlist - Levels in the VIX, SPY and QQQ [yt]( [Watch the video here!]( - Mark  [frep] One of the biggest names in the Semiconductor industry  Hey Traders, It's earnings season. So far…not so good. ASML lead earnings season off in a bad way with a huge miss and warn.  NFLX earnings…not so hot either, the stock is down almost 9% as I write this. Next week we hit a bevy of huge earnings in TSLA, MSFT, and META…we also have INTC at the end of the week. One of the names that has already reported is going to be the back bone of the AI Chip boom. Is its back sturdy and squatting 400 lbs….or is it rickety… We will break down this chip name that reported earnings this week… [Read on…]( - Mark  [fpip] Looking for a Good Time?  Hi Shoppers, Looking for a good time? Of course you are. Need to sharpen your trading skills? Unquestionably … we all do. Want to visit the absolute - without a doubt - best summer city in the U.S.? [Hell yeah you do!]( You will even have the opportunity to trade live and make money live. All you have to do is join the Option Pit Team for our spectacular annual live event in Chicago. Come join us July 22-24. We will all be there: Mark Sebastian - Your Only Option Andrew Giovinazzi - The Vicar of Volatility Licia Leslie - The Queen of the Candlesticks Frank Gregory - Our DC/Wall Street Agent Olivia Voz - The Volume Virtuoso Bill Griffo - Your Call Wall Authority There will be over a dozen guest speakers, specialists in all aspects of trading including portfolio managers, investment advisors and even a college professor. You will meet your fellow Option Pit members in person, many returning from last year. Hold onto your seat, the action will be endless! - Live trading with the best - Experience the trading pit on the Cboe trading floor - Drink at the infamous Cere’s Cafe - Dine at Chicago’s best steakhouse Gibsons - And of course cheer on everyone’s favorite team the Chicago Cubs It is honestly so much fun, I cannot wait to go! [So don’t miss out, join us for the Option Pit 2024 Live Summit, would love to meet you all in person.]( [Once you are good to go, I have a new trade idea.]( - Bill  [fprm] It’s a Tinderbox!  Hey Influence Traders, Over the weekend, Iran launched an unprecedented attack on Israel, which inflamed an already tinderbox middle east. Hundreds of missiles and drones were launched from Iran and proxy countries. Fortunately, Israel (and its allies) were able to intercept almost everything fired. The sheer number of drones fired was designed to saturate air defenses to clear the way for ballistic missiles. Israeli and U.S. aircraft shot down almost half of the 170 drones fired. Iran launched domestically built Shahed 131 and 136 drones. It also launched Kheibar Shekan ballistic missiles and Emad ballistic missiles. None of the drones, and just 5 of the 120 ballistic missiles fired got through Israeli and U.S. air defenses and hit Israeli territory. According to U.S. officials, many of the ballistic missiles failed on launch or crashed in flight. Four missiles did hit Israel's Nevatim Air Base. One of the key defense systems used to counter the missals was Israel’s Iron Dome system. While the system worked as intended, such an onslaught can easily deplete supplies. And that requires replacement parts. Let’s look at some of those suppliers. [Trade the Dome … the Iron Dome!]( - Frank Don't miss when our traders go live! Get an alert everytime we open the live rooms to all of our readers for free by selecting the calendar you use below. Add Option Pit Live Events to Your Calendar [Apple]( [Google]( [Outlook]( [Outlook.com]( [Office 365]( [Yahoo]( [glossary, logo] There are plenty of terms in the trading world that need explaining. The Option Pit Glossary is here to help. Today's phrase is:  Russell 2000 (RUT) - An index of the top 2,000 mid-market-capitalization stocks listed in the USA. 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