4700 holds the line, 2024 will be the year of 0DTE

Daily Pit Stop [FSTP] January 7th, 2024 [fstp] 4700 holds the line, 2024 will be the year of 0DTE  Hey OP Crew, AG’s alter-ego Vol Man here with my weekly analysis. As usual, I will start with my last forecast… Happy New Year to all! I took a break last week but Vol Man is back. Last Week: “Does VIX get back to the low 12s this week?  I think so with two 4 day weeks back to back, SPX would have to turn up a big move to get VIX jumping again. 2023 is about over and 4800 is just 44 SPX points away. It will likely get there slowly throughout the week.” Well VIX got the 12s and SPX sniffed 4800 before everyone realized the Mag 7 Tech were crazy prices and sold bigly. Apple Inc (Ticker: AAPL) is down from 199.90 to trade 180 ish Friday. 20 points is 10% and that is healthy after the massive rally in Nov and Dec. AAPL will be the subject of my OP Newsletter on Sunday. Even a 10% selloff in Big Tech is reasonable and only AAPL has been touched so far. The Big Tech Chips are still holding. That brings us to the hot jobs report on Friday. My early thesis in 2020 was people going back to work with a couple Trillion Dollars thrown at it after COVID would be good for the economy. It was then Joe B threw another 7 Trillion at it. Not-Transitory Inflation almost got Milton Friedman out of grave with a fist shaking rant. The underlying job situation is somewhat USGOV created with transfer payments, job creating subsidies and grants that are a result of massive USGOV spending. 40% higher budget than at the start of 2020 which is crazy to think about. Those are issues that make traders jiggly. My opinion the Fed can’t cut and as one of my students said, a good trader by the way, the Fed is trapped and will let the market sort it out until Congress gets its head out of its you-know-what. That is still the dominant theme going into 2024. When does the market balk at 2 Trillion dollar annual deficits. There will be great trading opportunities. Right now, 4600 or 4800 seems an easy target for SPX in the next two weeks. I am ambivalent about which way but I do not think the range will be more than that. [fstp] SPX daily price action over the last 30 days [fstp] SPX sigma (Vol per term average) levels over the last 30 days. SPX/VIX finished green/red on Friday with most vols lower after the NFP news. Most of the Jan vols are hovering near lows and VIX futures touched the cycle bottom Friday. VIX only drops on slow SPX movement from here on out. 10-day realized vol is 8.27% or roughly 23 points per day for SPX close to close. I cannot tell if stocks want to go back to 4600 or continue rallying now that the Fed is no longer raising from the markets point of view. A pullback, short term, is likely in SPX but I do not think it will last long until the bond market throws in the towel. [fstp]VIX cash is higher than 2 weeks ago and the VIX futures are lower. Oh my and yes that is totally normal and why I created Weekly Profits Cycle (shameless plug). SPX is lower and VIX futures are lower. VIX cash is just higher but is looking for a continued lower realized vol in SPX to keep moving lower. [fstp] VIX curve, Jan 05 2023 [fstp] Closing VIX curve, Dec 22, 2023 SPX is priced for 4600 or 4800 in the next month. A shade over that but seems very fair right now. VIX drops will be very slow next week if the market cannot pick up any downward momentum. I would say in this cycle, VIX cash is a little high relative to the VIX Futures versus historical averages. That means traders are jumpy and leaning to 4600 before 4800. [fstp] VIX 30 day chart with 1 min candles If I go with the straight VIX signal, SPX is lower next week. The larger rally on rate cut hopes is DOA as there is no chance the Fed cuts in March. I totally disagree with the 60% who think there is a March cut. I think without direction, some Big Tech gets soft for a bit next week before the rest of the market takes off. Jobs are still good for Main Street and that is the economy. SPX trades lower next week, maybe close to 4600 before resuming the march back up. VIX still closes in the 12s by the end of the week but could see higher in the short term. You might be wondering why I post the same charts every week. Pattern Recognition. [If you want some aces at that Mark and Licia started a 0 DTE challenge that is kicking butt for Jan.]( Let’s Go! - Vol Man  [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)  [fvix] My 5 Stocks to Watch In today's video, we'll cover: - 5 Stocks on my Watchlist - Where is the SPY and QQQ moving next? - What's happening with the VIX. [fvix]( [Click here to watch the video!]( - Mark  [frep] Our Themes of 2024 Hey Trader, For our first Pit Report of the year we are going to do something a little different. The financial media, talking heads, twitter bros….just about everyone puts out a year end prediction for the markets… We are not going to be doing that…but what we are going to do is share our single best idea for 2024. It might be an index, it might be a stock, Licia, Andrew and Myself will reveal what we are buying to start off the new year… [Read on to see what's on our shopping list….]( - Mark  [logo, fpip, Profits In Pumps] Bull and Bear Flagging Hi Shoppers, The new year is off to a great start. Our [0DTE January]( class had a profitable week. We had two great wins and one possible win (if you were quick enough) in our first three days of trading. We traded XSP and SPX for over 500%, over 300% and possibly another 300% plus. If I am not mistaken, there may still be an opportunity to get into our 0DTE program for the rest of the month. [Come join us, it’s very fun.]( Now a quick lesson on flagging. Bull and bear flagging occurs during a stock’s move, higher or lower, when it decides to take a pause or breather, in its rally or sell off, before continuing on its way in the same direction. You can detect it by the pattern on the chart. It will be a series of less volatile sessions creating a group of candles that are consolidating.  [fpip]( [fpip]( [If you continue here, I will show you the flagging I am seeing in Johnson & Johnson (Ticker: JNJ).]( - 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: Barrier to Entry - meaning a particular company has a moat of protection built around their business that restricts competition from gaining market share on them. [fstp] All the Right Options. The Option Pit Team brings more than 150 years of experience to you every day. From the trading pits of Chicago to the world's largest banks to the halls of power in DC -- they've done it all. Now they’re collectively focused on one thing: making YOU a better, more profitable trader. Click the button below to schedule a call with our concierge Customer Care Team to find your best fit today. 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