Volatility Snapshot: Today’s Action
Good Afternoon Traders,
We broke one of our rules this afternoon and purchased a small slug of calls on UVXY, mostly out of sheer boredom. Watching the markets this week has been akin to watching paint dry and while we don’t like losing money, we can’t help but think we may see a selloff in the SPX down to at least $2630 over the coming days.
Our thesis is grounded in a sell the news event following approval of the tax reform plan and a belief that tax selling will also begin over the next two weeks.
The VIX finished the day at 10.39 with contango settling at 13.77%.
As we mentioned above, we could see the SPX testing $2630-$2640 over the next few days with the next stop being $2610.
We continue to sit patiently mostly in cash wasting for a new short opportunity. Our gut tells us next year will bring more volatility but only time will tell.