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Volatility Games

Volatility Games

by The MoleJanuary 2, 2014

Those bastards are not wasting any time it seems. I’m seeing some peculiar moves on the volatility side. More specifically last week we were drifting higher on fumes while the VIX was ramping higher as well. So if you were buying options of any kind – puts or calls – guess what, you overpaid!

Our SPX/VIX ratio chart shows this very nicely. The yellow line is the ratio and it started drooping on Monday and then proceeded lower pretty hard on Tuesday. Now today we being served the exact opposite – equities are pushing twerking ass while the VIX is slightly blushing. Whatever it is they’re playing – don’t get lured into playing options right now unless you absolutely know what you’re doing.

Now it’s the first trading session of 2014, so we assume there is some accumulation or at least some sector reshuffling going on. But I still don’t like this – best to treat lightly.

The TF has dropped into support on the daily and on the weekly. Now do I feel tempted to load up on long positions here? Not really but I may risk 1/2R on a long if that daily NLSL remains intact by the close.

Alright – let’s ease our way into 2014. I’ve run into two very nice long term setups you will enjoy:


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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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