VIX Reverses
Once again, gold and silver
(
$XAU.X |
Quote |
Chart |
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PowerRating), remains a loosely-formed, low-level cup and handle. Continue to
look for buying
opportunities in calls and call spreads here.
For you OEX traders, VIX gapped to new highs
as the market gapped lower. Then, as the market reversed after probing its April
lows, so did the VIX. This action suggest that the VIX will finally
revert back to the mean and the OEX will bounce. Therefore, look for strategies which seek to capitalize on volatility reverting to the mean (i.e.
decreasing). Use caution though as many of these strategies offer limited gains
with the potential for unlimited risk.
Follow Up/Looking Ahead
As you are likely aware, many sectors remain
in strong downtrends. Once we begin to bounce, we should get some setups on the
short side.
Best of
luck with your trading on Tuesday!
P.S. Reminder:
Protective stops on every trade!