Since the VIX touched below 29 last friday, the SPX has done little, but IV has done a lot. I think we have one more quick look down to 1150. Take a look, and what do you guys think?
I think the VIX is heading back toward 40 one more time, and then this mess might finally end. A huge rise in IV and little movement is not normally a great sign. Even so, I do not see the market selling off below 1125 this time. I think we sell fast but not far. Look for than nice pop in the front month. Then again, who knows, maybe the Europeans come out with something really intersting at the summitt.
I think one has to OWN gamma unless one sets up something VERY wide like an iron condor. Butterflies and Long calendars are going to be losing right now. The best trade continues to be the short time spread. When XIV falls below 6, I think it is going to be a huge scoop, and I would be entering there. Keep an eye out for an AMZN earnings play tomorrow on TheStreet.com.
Follow Us On Twitter: @optionpit
Graphs from LiveVolPro
