4600 new floor, beware the Jesse Livermore Rule

Daily Pit Stop [FSTP] Your financial advisor won't tell you this... but Andrew Giovinazzi will: There's a way to make 3X what a traditional FA averages, and it'll only take you 10mins a week to manage yourself. PLUS, you keep 100% of the profit. [Watch Here to Learn How]( 4600 New Floor, Beware The Jesse Livermore Rule  Hey OP Crew, AG’s alter-ego Vol Man here with my weekly analysis. As usual, I will start with last week’s forecast… Last Week: ‘The trade for me is buying longer duration, into January SPX/SPY options and just letting the Santa Rally run. VIX strangles like we run in the Trading Desk make the most sense here because they win in a slow melt of VIX and a parabolic selloff in SPX on debt crisis. It is likely SPX continues the unwind of the QQQ stocks to other stocks. This will press VIX closer to 12, possibly the 11 handle this week. The Dec12-13 Fed meeting will present a gamma buying opportunity once again as it has every cycle in 2023 and 2022.”  We never saw 11 VIX and stocks traded sideways until the NFP number on Friday. The AI pop for Alphabet Inc (Ticker: GOOGL) kept the tech hopes brewing and made new highs for the year seem likely. I stayed long delta in all of my trading products from [Pro, Easy Trade Button, OP Mentoring, Trading Desk, via short VIX, and Weekly Profits Cycles](. I switched from some VIX puts to SPY calls in WPC and I will explain why. In short I wanted to get on the train and that train was jumping over 4600 SPX so i had several nice wins this week.  The Invesco QQQ Trust (Ticker: QQQ) and the Russell 2000 (Ticker: IWM) continued higher which sapped up a lot of money. Below, SPX rallied about 1% for the week from the Monday open but almost unchanged from Friday’s close. My thesis, waiting for the Fed to say everything is ok on Wednesday. Of course JPow will not say that, but he won’t raise rates either. That will send stocks flying. [fstp] SPX daily price action over the last 30 days [fstp] SPX sigma (Vol per term average) levels over the last 30 days.  Sigmas are where the real story is. Implied vols are up all week with VIX being flat. How that works is SPX rallies, pressing the VIX calc lower, but IV per strike pushes the other way. The bid for options is still there because the market remembers the free-for-all on the upside when JPow puts on his game face. 10-day realized vol is 6.67% or roughly 15 points per day for SPX close to close. This is more like normal bull market action. The 3 years since COVID and massive USGOV stimulus is the exception not the norm. The Fed’s intrusive action is what creates the upside volatility. [fstp] VIX dropped and was down just around .28 with the VIX futures down more than that in the short term contracts which is consistent with VIX decay and the exact assumption I built Weekly Profits Cycles. SPX can be flat and VIX futures move. [fstp] VIX curve, Dec 01 2023 [fstp] Closing VIX curve, Dec 08 2023 Normal contango has set in so the next big event is around the Fed meeting Dec 12-13. [fstp] VIX 30 day chart with 1 min candles I don't think 11 VIX is possible until Friday. That will crush vol products and VIX futures and be very good for puts in those products. The Dec 12-13 Fed meeting will present a gamma buying opportunity once again as it has every cycle in 2023 and 2022. If the Fed ain’t raising most of the bad sentiment from 2022 will be forgotten and people will notice they don't own any stocks so the run will be up not down. Weekly Profit Cycles is back to Option Pit and I did add SPY calls and reduced VIX puts for the Fed Meeting. [WPC has posted 26 of 30 trade wins at Money Map Press. I hope to do the same thing back at Option Pit.]( - AG  [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)  [frep] Ticker of the week: SPY Each week, I’ll give an overview of a stock and Licia Leslie will follow that up with a chart analysis the next day. Bill Griffo will chime in with macro analysis and Andrew Giovinazzi will then finish out the week with a volatility breakdown. If you missed how I create income from long options, check out my Weekly Profits Cycles presentation and harness the power of volatility. The SPDR S&P 500 Trust (Ticker: SPY) is the most liquid trading product on the planet. I think there is some crazy volume in China for rebar or mung bean futures but for a listed product in the USA, SPY is pretty good. The reason it is so good may surprise you. The only listed product on the market with a reliable volatility hedge is SPY. What that means is option traders can separate risks out of the position and trade for very specific ways.  [That is the basis for my Weekly Profit Cycles program.]( What we have going into Friday Dec 08 is an interesting market condition. [frep] [Let’s see what it is.]( - AG  [logo, fpip, Profits In Pumps] A Closer Look at Crude As I have talked about recently, crude has created a head and shoulders top and has had a pretty good sell off. The target price is the difference between the high/low of the head and the neckline and then added/subtracted to the neckline at the breakout point. This is 95 - 81 = 14. The breakout occurred at 84 less 14 = 70. The low on Thursday was $68.80. This may be the completion of the head and shoulders as it has hit its target price. It has also reached the lowest support level of my pitchfork: [fpip] If you zoom in on this chart, you will also see that Thursday’s action created a doji and Friday provided confirmation trading higher. The Relative Strength Index is turning up, too after bottoming just under 31. A 30 or less RSI is considered oversold. You can read [Bill Griffo’s take on oil here]( as further evidence. Looks to me like oil could be bottoming here. Before I show you how to play this, check out what [Mark Sebastian’s Delta Strike]( has been up to. [Click here for the trade idea.]( - Licia  [Glossary] There are plenty of terms in the trading world that need explaining. The Option Pit Glossary is here to help. Today's phrase is: LEAPS - Long-Term Equity AnticiPation Securities, or LEAPS, are options that expire in January and can go several years out. All the Right Options. The Option Pit Team brings more than 150 years of experience to you every day. 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