J-Pow, a Debt Deal, and a Broken-Down VIX

[] [The daily rundown of everything happening at Option Pit.]( [.]( MARK-et Open Hey OP Crew, Vol Man here with my weekly analysis. The story for the week was the Invesco QQQ Trust (Ticker: QQQ) and the 80-point rally since Oct 2022 lows. 30% rally from the bottom and a bunch of that happened this year. The momentum died Friday but was still impressive. Just keeping the performance this year will be big. Friday morning did give us a new low for the week in VIX, but it didn’t stay there as J-Pow delivered his basket of goodies blaming everything but Fed policy. Nonetheless, SPX managed to move out of the weekly stranglehold that kept stocks from going anywhere. J-Pow noise aside, it was a good week for the big-cap stocks. Implied vol finished near the lows of the week: [ SPX daily price action over the last 3 months, with realized volatility on the bottom chart VIX Jun21 futures were down $1 over the week. Some extra premium came out of the futures, and the J-Pow testimony didn’t move the needle a bit. The news did sound bearish, but only less than .50% SPX. [ Closing VIX curve, May 19, 2023 VIX spent most of the weekly sliding with the SPX rally: [ VIX 10-day chart with 1-minute candles. VIX broke down this week. VIX caught a bid into the weekend uncertainty because the politicians have to do the dance of “fighting for priorities”. While we count down to the debt deal, VIX is likely to stay here and maybe range a point here or there. If there’s real reason to panic, VIX could pop. The long/short pair ideas still work fine as long as the expectations are modest. Mark and I closed another [Trading Desk]( pair this week. Given current moves, 16 VIX is probably as low as we see next week until the debt crisis issue is resolved. Without Fed machinations, VIX could see some lower numbers. July Cycle VIX puts are looking quite interesting. Let’s Go! [/campaigns/org775804783/sitesapi/files/images/774695510/ag (2).png] Pit Report: Is GLD Vol a Buy or Sell?Just when you thought it was safe to jump in the water, J-Pow gives the market a shiver on Friday. Is it moving SPDR Gold Trust (Ticker: GLD) enough to move the implied volatility anywhere? [ [Inquiring minds want to know!]( - AG Power Income: The Gamma Squeeze of the Year In the middle of a bank crisis, a debt ceiling crisis, and a commercial real estate crisis you would never expect a FOMO rally … would you? Well, you should – that’s when they’re most likely to happen. We had a textbook edition this week and it was a masterpiece. Although I must admit, I did not come away clean, and I was miserable for not seeing it coming. [Today, I’ll lay out the phenomenon for you and an example from Thursday, plus a trade now that the damage is done.]( - Griff Power Moves: Gov or Private SectorThere has been a lot of talk of government programs taking the place of private companies. Nowhere is that truer than in the banking sector. After all, the past few months have witnessed the government taking over regional banks. Many operating banks still remain on the hot seat. There is some truth to government takeover. And there are some rumors – Fed payments systems, CBDC launches, and more. We are going to discuss that inside as it could have ramifications for stocks and crypto. But first, let’s see where the debt limit discussion stands. Headlines from the past few days should clear it up: Let’s clear it up a bit inside. [Click here for my full report: “Government Takeover”]( -Frank Profits In Pumps: Take Your Profits!! I have a confession to make. I am a frustrated trader at the moment. [ Yes, I know this market hasn’t been easy to navigate. I have been looking for some kind of follow-through… even just a little bit. The majority of my trades become winners, some as much as 50%, but I see the charts and think it has more to run. And of course, it reverses and tests my every nerve. EVERY TIME! (or so it seemed this week) It is never easy to stick to your guns, especially when “everyone” is calling for a move in the opposite direction. We are all flawed 100% of the time. We don’t even need to be right more often than we are wrong. What we do need to do as profitable successful traders is have our winners make more money than our losers. So, AT THE VERY LEAST, CLOSE HALF OF YOUR POSITION! And on the bright side, my recommendations here have been pretty darn good. [Here is another one.]( - Licia OPTION PIT GLOSSARY [( There are plenty of terms in the trading world that need defining. The [Option Pit Glossary]( is here to help. Today's phrase is: Big-cap: These are large market capitalization stocks with a value typically more than $100 billion. Most of these stocks are in the Dow, S&P 500, and NASDAQ 100 stock indexes. [( DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. 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