After several days of selling the S&P 500 Index firmed up a towards the 2910 level on Thursday’s close. With 10 trading days left until expiration day, the index remains about 8.5% above the short out of the money 2650 put strike price.
When our latest edition of our HiPOS conservative trade was entered the S&P 500 Index stood at 3020. Intraday Thursday we see the market hanging around the 2975 level in what I would call a bit of a meandering market.
After yesterday’s Federal Reserve announcement of another ¼ point rate cut, the market settled back in as volatility was removed from the market. Now many long time HiPOS followers might logically think higher volatility on Fed announcement day would have been a better environment for the trade?
Well, after what seemed like a volatile few weeks, the markets are just a bit higher than where we were at the entry of our current, but soon expiring primary conservative HiPOS trade. Looking at the graph above, you can see the market never seemed to make any threatening moves towards the position. So, after all that volatility, we are now just about where we were when it started.
To quote a famous 1972 song from Stealers Wheels, the market is “stuck in the middle with you”. This may come in handy should you find yourself in a random trivia game, or it could just be a nice analogy to where we’ve wound up in the underlying S&P 500 Index.
Jay was able to speak with Oliver Renick on the TD Ameritrade Network this morning regarding what ZEGA’s traders are looking at in today’s markets. With the heightened volatility lately, Jay went into detail about the Pairs tactic that is used in HiPOS Aggressive.