Traffic Light Change…Here’s Why

The VIX ended the day flat…

The VIX futures were down…

VXX was down….

All of the major indexes were down…

What does this mean?

It means that we are starting to see a change in money flow.

We have seen VIX lows happen NOT when AAPL is off to the races (or the other big 5 names)…

⇒ VIX lows happen when XLI,  XLE, and XLF are rallying. <==  

This is because the OLD economy has been where ALL of the perceived risk is living.

Now that the end might be near and a Vacine MIGHT happen,

we see a rallyin the transpo’s, the industrials, and the banks.

Meanwhile money comes out of the QQQ.

BUT with money leaving 23% of the S&P 500 and into a chunk of the other 77%  what is going to happen to the market?

Nothing if the dollars moving are somewhat dollar neutral within the stock market.

Thus, VIX falls.

I am switching the traffic light to RED.  

I think volatility is going to be moving to a new level revolving around 25 or maybe even lower…

It was hovering around 30.

The VIX Traffic Light is Red.

Your Only Option,

Mark Sebastian

  • DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees do not offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. 
  • Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Option Pit LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute a solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy.
  • To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Use caution when entering any option transaction and it is recommended you consult with your financial advisor for investment, legal or tax advice relating to options transactions.

Leave A Response

* Denotes Required Field