Don’t miss our Saturday class in March-?How to sell puts in an ugly market.

What a difference a day makes?

I guess the Russians not invading the Ukraine is enough for new all-time highs in the SPX.? I have not gotten in the way of this market yet, and will not start now.? The thing I am looking for is what is on the horizon that will make IV move next.? Most likely that is the employment numbers this week.

The chart of term structure is help here. Today?s TS is getting very steep, especially relative to the potential catastrophe set up we had yesterday.? Note how the near term future has peeled down the most.? That is the market saying we expect a lot less movement in the near term.


The two big items for the month are ADP tomorrow, and to an extent, NFP on Friday.? That is to keep the last vestiges of IV premium in future term structure.? Even a halfway decent number tomorrow could crumble the rest.? Then, it is bye-bye for IV until the earnings kick in.? That is unless Putin invades something else.

The Trade

The VXX and UVXY could be set to take a new leg to lows.? If you believe the market is still moving up the IV should follow after the NFP.? Set up by buying some OTM VXX puts of 1 month duration tomorrow after the ADP number.

I still think the Emerging Markets are a buy here, and like ratio put spreads to get long

Disclosure: Positions in VXX and EDC, EEM