🚗 CAT's Out of the Bag

[] [The daily rundown of everything happening at Option Pit.]( [( MARK-et Open Hey OP Crew, Griff here with your Chart of the Day. The CAT was left holding the bag today … Caterpillar Inc. (Ticker: CAT) traded off 7% in trading today after the construction equipment maker released a less-than-expected sales forecast for the ongoing Q4. The company reported upbeat Q3 earnings, but machinery and engine sales in Latin America declined by 13%. All this shellacking has done is bring CAT’s price back to fair value, which is around the $220 strike, which you can see is the next large negative gamma strike, which offers support below … [( I would hold out for a chance to get it closer to the $200 level, which is the last high net negative strike and also just above a 50% retracement from the Covid rally. Let’s Go! [ Trader's Edge: A Treat for Market Bulls...Or Is It a Trick? Monday was certainly a treat for market bulls….but is it a trick? So far this quarter Mondays have been bar far the best day to be long. Its also been a trend break for VIX, historically VIX has been down on Mondays, but with the weekend risk from world events, we are consistently seeing VIX up on Friday and down on Monday. Monday’s rally was a bit different though because the Dow was the leader, not big tech… But, as we head into the throws of the week, the FOMC looms, as does Non-Farm Payrolls… Oh…there is also AAPL earnings. So what can you expect from this week based on Monday’s trading… [Here is your answer and what to do with it…]( - Mark Power Moves: But They're Our Defense Companies! Happy Halloween! I’ve been spending a lot of time in D.C. lately. It is spooky out there … at least according to my former Agency buddies. There is much turmoil in the world. And, despite finally having a new speaker, much of D.C. remains at a standstill. Government funding is set to run out Nov. 17th. A bill advanced by Republicans is unlikely to pass. President Biden is seeking $109 billion (yes, you read that right) for aid to Israel and Ukraine and Taiwan. Air strikes were ordered by U.S. planes against Iranian proxy forces in Syria. 900 U.S. troops have deployed to the Middle East to “further bolster U.S. force protection capabilities.” Tensions in the middle east and around the globe continue to rise. Despite everything (bad) going on in the world, defense stocks have been in the basement. That goes against what I’ve been seeing and hearing. [Let’s figure it out inside - click here for my analysis.]( - Frank AG's Views: Flat Again ... From the desk of Option Pit Director of Education Andrew Giovinazzi The FOMC puts out an interest rate decision tomorrow and traders cannot help but bid the near the money and the upside up. The skew says they are looking for some upside move in SPX after the Fed speaks. This is a snap of upside butterflies in SPX for Nov03 cycle. The market is pricing the just upside call with positive edge: [( That usually means money is betting on an upside move. I added some to the riff sheet for the Trading Desk. Let’s see how right they are. - AG 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: Meme stocks: Typically stocks that are popular among Reddit and Robinhood users, called that because millennial traders often make memes about stocks they’re trading. [( DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. 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