🚗Bull Markets Have Selloffs – See Last Week

[] [The daily rundown of everything happening at Option Pit.]( [.]( MARK-et Open Hey OP Crew, Vol Man here with my weekly analysis. Stocks got a bit tired right at the end of the week after a decent little Friday morning early on. I closed some calls in the [Trading Desk]( – I think my students did a bit better than me – but overall it was a satisfying week owning some puts for credits going into Monday. Do we sell off Monday or not? That happens in a bull market; the buyer gets tired. How tired? Look at the VIX futures levels. [ SPX daily price action over the last 30 days SPX came back a bit this week after the quarter end window dressing I mentioned last week. What got folks spooked for a minute and drove VIX over 17 briefly was inflation and rates – too hot an ADP number and folks freaked out. The VIX curve has a decent contango, but VIX futures are almost a full point higher than last week – .81 to be exact. Traders were not content to let vol drop back to the “window dressing” level. [ Closing VIX curve, Jun 30, 2023 [ Closing VIX curve, Jul 07, 2023 VIX is still $2 above the lows of last week, so the key here is how the market reacts to rate hikes. It appears the market is pricing in higher rates because inflation is still running higher and food is still not down to reasonable levels. Wage pressure is real – I don't care what Austan Goolsbee says. Try hiring someone right now … good luck. [ The reality is that the COVID recovery is still ongoing, and government spending is still obscene. Both of those are wildly bullish. Market acceptance means lower VIX. I think the brief flirtation with Zone 1 is over, and 13.5 is all we get out of this week as a low. That also means the [Trading Desk]( and [Easy Button]( strategies will still do well. I expect a bit more up and down with SPX this week. Let’s Go! [/campaigns/org775804783/sitesapi/files/images/774695510/ag (2).png] Pit Report: META Invents More Social Media The Metaverse was short-lived. It’s still there, but somehow Apple Inc (Ticker: AAPL) puts out crazy expensive 3D goggles and the stock goes to ATH. Meta Inc (Ticker: META) ditches the Facebook name and launches a Metaverse, and the stock goes down 70%. Go figure. Maybe folks were sick of Zuck and like Tim Cook better. I’m here to talk vol in META – still hard for me to call it META. The reality is that META is on a massive run to regain all of the value it lost in 2022. In a word … unreal. Three billion users is hard to replicate. [ Two year chart in META with 90 day IV Now it’s time to compare the vols to the last time it was around $300 – that was a while ago – to find some trading edge today. [Click here to read my full volatility analysis.]( - AG Profits In Pumps: It Worked So Well It worked and it worked so well! I showed you the signs of [a change in trend on a stock chart]( on Friday. Can someone please email me at support@optionpit.com and tell me you bought Walmart (Ticker: WMT) puts on Friday? Here’s what happened: [ The stock was down $3.60 on the day. I called for WMT to trade to $154, my old resistance/new support level. It closed at $153.50. Nice signals, right? So where does WMT go from here? I would watch this level as it has bounced from here before. It may want to test that 50 day moving average coming in at $152.20. Watch the daily candles for a change in trend from this sell off and trade accordingly. [I have another interesting chart to show you when you click here.]( - 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: Contango: When the back-month futures are higher than the spot and near-month futures. Often used when referencing volatility assets. 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