3309 Drysdale Ct
Edwardsville, IL 62025
Steve - we're almost halfway to your observation that a 1000
point move was possible if the market pushed up to a high....way
back on 16 August. A month later, and it doesn't seem so
Thanks for the feedback. Tracking now.
XLE - no one got my dumb pun. I'll live ;) But does anyone have
any idea where that spike came from?
XLE - whoa, someone just flipped a switch?
rfa300 - Yes, using UNINTENTIONALLY was intentional, on my part.
I have plenty of clients that persistently forward me links to
various people talking about "the Great Reset," etc, etc. Or Robert
Kiyosaki links. Most of the links are from people that profit from
the sale of gold and silver, in one way or another. I choose not to
go down those rabbit holes and didn't want to trigger anyone to
think i'm on board with the theories surrounding conspiracies to
bring down the country. I have nothing against people who choose to
believe in these theories. I'm just not personally in that
Wedges & Flags - I have some code / scripts that identify
them, but they suck for now. Will probably be hard to beat the
computer approach once they get better!
Anyway, your systems have been rocking, Matt. Thanks!
Agree. Pattern recognition is all based on history. But it's a
different kind of pattern recognition. I'm sure you have seen the
Ciavacco video on YouTube, right? He attempts to overlay time
periods from previous historical events and includes mentions of
things like recessions, inflation, etc. Instead of just looking at
the short term levels and patterns that are presenting
Ciovacco Capital - this is why I stopped watching stuff that
relies on historical analogy to predict movements instead of just
trading level to level. For one, there is no historical analogy to
this period. There just isn't. Fed, Congress and the Executive
branch all worked together and, unintentionally, created an almost
unsolvable maze of economic conditions. The only way out is to,
eventually, fall on our sword. But we're going to fight tooth and
nail to avoid that eventuality.
Inflation Reduction Act 2.0?
Why am I stuck with an uneasy feeling that Biden is looking
at outcomes today on inflation and markets and scheming where to
drop the next trillion dollar bomb on the economy?
"Climbing a wall or worry" saying should be renamed. What was
really going on all those times over the years was "Climbing a wall
of Fed stimulus." Not happening this time.
I only trade SPX options in taxable account and SPY
options in retirement accounts (better liquidity but I have to use
more contracts). Since I've focused my efforts on what
amounts to a single product / index, my results have been
outstanding and predictable. Unfortunately, I know that
someday I'll likely have to transition over to more volatill e
products again. But with the VIX where it's been at recently, I can
stick with a single index for my option set ups and do just fine.
I'll cross the lower volatility bridge when we come to
"Focus, Grasshopper" - Mr. Miyagi, 1984
CPI in the morning. System trades?
Ballsy close with CPI before the open. Market thinks if the
print is even a little below that they will force the Fed to pause.
I think they have another thing coming (unless JP is bluffing)
Clearly they were hedging their purchases (based on VIX)
Ladder happens naturally if you're watching the market daily and
doing credit spreads on both sides of the market (selling calls
spreads wehn overbought and put spreads when oversold).
I tend to sell options with around 45 days to epiration and
they are always out of the money (no more than 20 delta when sold).
Given these parameters, I'm not sure what you mean by "flat market
is no good." I would LOVE a flat market right now. Although,
you want the vol to be high when you enter the trade, you WANT it
to collapse after you're in (with credit spreads)
The TA from the site is critical to my credit spread selling
strategy. I use it to pick the levels / strikes that I sell and
when to sell them (overbought = start selling call spreads,
oversold = start selling put spreads).
Never heard this quote but agreeing with it somewhat explains
why I sell credit spreads on both sides of the market as my primary
strategy. If I was more confident in market direction and timing, I
would logically be buying debit spreads instead for the larger
potential returns. Selling credit spreads allows me to win on 3 out
of 4 outcomes. Buying debit spreads means I only win on 1 out of 4
possible outcomes...and I'm essentially admitting to myself that my
base case has a high likelihood of not playing out the way I
VIX higher - people buying puts into tomorrows print to offset
their long exposure makes a lot of sense. Would be a bit surprising
to see the normal VIX / SPX relationship today.
retirefire - I don't know this to be a fact, but I keep hearing
the Fed has never paused a rate hiking cycle with their rate below
the current inflation rate / CPI (not simply below say the 5 year
expected inflation rate). If that's true, we could print a 6 on CPI
and would still be nowhere near the end of the tightening cycle
(we're not going to print a 6, FWIW).
Right, so you're in the "The Fed might be bluffing" camp. That's
fair. They might be. It wouldn't be the first time. Talking a
strong game sometimes does a lot of their work for them. But in
this case, they are talking a strong game and monetary conditions
are still loosening (loosening across the board today). I
think that was clearly why JP did such a short, forceful speech
last time around. He is annoyed at not being taken at face
Bearishness doesn't have to be complicated right now. The most
important rule in this business is "don't fight the fed." No other
rule comes close in importance. The market is openly
fighting the fed at the current time. You hear it all the time in
various interviews on CNBC. They believe that either JP doesn't
have a cajones to do what he needs to do or that inflation will
roll over sooner rather than later which will make the Fed pause
sooner than advertised...or both. Either way, the market it
refusing to take the Fed at its' word. We saw what happened on the
way up when people were trying to figure out why in the world the
market was levitating in the midst of a global shutdown (answer:
The Fed and just the Fed) and we'll see what happens now if the Fed
keeps it word on rates and QT. Unless the market is right to fight
the fed this time. Fighting the Fed always ends in tears. The only
hope for bulls is their belief that the fed is bluffing.
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