The good news is the panic-selling has subsided.
Back in the days of trading on the floor, today used to be a busy day known because it’s a triple witching day.
Triple witching is when index futures, index options, and stock options expire on the same day (on the third Friday in March, June, September, and December).
These positions that expire need to be rolled forward, so it’s likely we will see odd price action like a leaf blowing around.
But, today is more like 50-foot waves rocking the boat back and forth.
The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), at 66, levels like the financial crisis.
Despite today’s weakness in the S&P 500 the good news is that we’ve been holding up the last three days.
Now that we have our feet under us, we have to remember that we must trade the market we have today, not the one we want.
That means we’re setting up for a rip your face off rally.
A relief rally will help ease some of the pain we’ve encountered and provide some optimism.
When we do rally, that doesn’t mean we are back in a bull market.
We are in a bear market, which means every single rally must be sold!
How we’re going to thrive in this market environment is by playing both sides, but have a downside bias in the market.
We want some long positions due to the fact that there will be large spikes – but as I’ve been saying, those spikes will be sold off.
With that said, we’ll continue to stick to our trading plan and trusting our system.
As you’ve seen so far, my team and I won’t leave you guessing or wondering.
I have a policy like the U.S. Armed Forces: “Leave no investor behind.”
Let’s talk about our current positions…
- On Thursday, Buy-to-open the Huntington Bancshares Inc (NASDAQ: HBAN) May 15, 2020, $8 call (HBAN200515C00008000) up to $1.18 per contract or better, for the day.
Right now, our open positions are:
- Vistra Energy Corp. (NYSE: VST) April 17, 2020, $25 call (VST200417C00025000)
- Glu Mobile Inc. (NASDAQ: GLUU) June 19, 2020, $7 call (GLUU200619C00007000)
- Huntington Bancshares Inc (NASDAQ: HBAN) May 15, 2020, $8 call (HBAN200515C00008000)
As always, keep sending your questions and feedback to [email protected]
This is an uncomfortable time in our lives, but there’s no better time to be active in the market than it is today.
My team and I will have a new trade for you on Monday morning.
Be smart, safe, and proper.