🚗J-Pow Holds the Line

[] [The daily rundown of everything happening at Option Pit.]( [.]( MARK-et Open Hey OP Crew, The Jackson Hole comments were more of the same and no immediate rate relief in sight. I think the market took that as a sign that things aren’t terrible so they must be okay. Stocks finished on an up note, but not at the highs. Anyway, it’s Vol Man here with my weekly analysis. As usual, I will start with last week’s forecast: Last week: “I think we have a meander week into Nvidia Corp (Ticker: NVDA) earnings. I think those earnings will be good but not enough for a $100 rally in the stock. I like Iron Condors in SPX and SPY right now as I think we go sideways. VIX might touch 15.” NVDA was up $50 on earnings at one point, SPX meandered, and VIX closed 15.60s. Not too bad on the Crystal Ball. Most of my trading was around this idea. My biggest problem this week was closing upside calls and calls spreads in my products. I was to close the GTCs but had to move quickly Thursday to close upside. I didn’t get it all, so the rally into Friday’s close is somewhat heartwarming. Stocks meandered, closing at the same place as Monday’s close, but with 2 strong 1% moves Wednesday and Thursday. That got realized vol up a bit to cross 12% in SPX for the first time in a month. With NVDA out, a big upside catalyst is hard to come by, so I’m glad I’m not holding a lot of upside SPX calls. But I have some. [ SPX daily price action over the last 30 days [ SPX sigma levels over the last 30 days. Sigmas erased all vol gains this week. Crossing 15 and going lower is possible for VIX but the longer term Nov is still holding up. Realized vol is 12.98% in SPX. That reflects the two days of action in and around the hype leading into the NVDA earnings. They were still pretty good. The jump in realized vol remains to be seen if it can hold. Downgrades and credit issues won’t get stocks moving. What will? [ VIX cash closed near 1.5 points lower with the curve back into normal contango and short term IVs lower. This is the start of a vanilla IV compression into lower realized vol. [ Closing VIX curve, Aug 25 2023 [ Closing VIX curve, Aug 18, 2023 VIX is not quite below the gap after the FITCH downgrade on USGOV. It’s getting close. I expect stocks to drift upward again with 4500 SPX in easy reach. [ VIX 30 day chart with 1 min candles Most of my opinion is lack of movement in SPX with not a lot of great news. I am looking for the 14 handle in VIX next week and 4500 SPX. AI is still keeping the homefires burning. The BRICS currency block is in its infancy so it did not do enough to roil markets, yet. Let’s Go! [/campaigns/org775804783/sitesapi/files/images/774695510/ag (2).png] Pit Report: Will the Volatility Generate Any Power? Here’s my weekly take on volatility in a name from our subscribers. The name this week is Generac Holdings Inc (Ticker: GNRC). Full disclosure: I HAVE A GENERAC GENERATOR AND I RUN MY HOUSE ON IT WHEN THE POWER GOES OUT. It works great, and once I discovered removing the fuel after use, my carb never gums up so it always fires up – even without using that crazy priced non-ethanol jet fuel. At one point GNRC was a $500 stock in 2021. Probably riding the green revolution or something but it has not gotten anywhere near that lately. Recently, the stock dropped $40 on a bad earnings call as revenues slipped and higher prices did not make up for it. I’m here to look at the volatility. [ There are some interesting things afoot … [Click here to read on.]( - AG Profits In Pumps: Time to Toot My Horn Remember when the ratings outfit Fitch downgraded the US debt? It was a pretty big deal. [We talked a lot about it here at Option Pit.]( We were all asked to give our best trade idea that day. This is the trade, description, and plan I sent to my [Option Shopper]( members: 08.02.23 10:12 AM – Buy to open 5 WFC Sep08 44 Puts pay $0.92 maximum $0.97 – filled $.93 Wells Fargo (Ticker: WFC) has a bearish engulfing candle right at my resistance on my pitchfork: [ I went a bit further out on my options because I think WFC can trade down to that support level at $41.50. There will be some support at $43 where the 50 and 200-day averages are located. I would like to sell these for around $3.00. I will take my loss if the stock closes over $45.50. Guess where WFC is trading now. Guess where those puts traded on Friday. [Click here and I’ll show you those prices and how to play WFC this week.]( - Licia OPTION PIT GLOSSARY [( There are plenty of terms in the trading world that need defining. The [Option Pit Glossary]( is here to help. 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