Quarter End Window Dressing - Let The Pump Begin

The volatility monster has broken off his/her leash this week and is having quite a party; I guess his/her parents are out of town. Volatility house party - woohoo!

Yesterday's weakness was expected but the ferocity of the decline as the day went on was surprising. But not to worry, the pump is back in effect this morning with futures up over 1.5%+/-. I expect strength today and tomorrow as it's quarter end and it is time to dress the windows. (Window dressing actually began earlier this week with the squaring of positions heading into options expiration and quarter end - hence the volatility.)

I expect a little hangover next week after the volatility house party is over this week. I think we are setting up for a nice tradeable bottom but that doesn't mean we couldn't violate the S&P 1100-1120 low.

The Weekly Advisory SPY position is setting up well as OpEx approaches. Things got a little tight earlier this week with the short squeeze rally but I stuck to my analysis and trading plan and the market sold hard providing some nice breathing room. The futures rally still gives a nice margin of safety with the spread expiring tomorrow but I am keeping a close eye on things; one can never be too cautious.

The Monthly Advisory has one SPY spread open with October options right now with more trades on the radar to deploy. I am waiting for a further rally before doing so - possibly today or tomorrow, we''ll see.

Navigate wisely and stay profitable, my friends. Happy trading!

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