VIX Getting Stretched

Thursday’s market reversal has put me into a
“wait and see mode."  Shorter-term, the market is overbought and due
for a correction. However, just because it’s overbought doesn’t mean that it
can’t go higher. Therefore, wait for evidence that the market is stalling out
before considering put purchases.

$IIX.X |
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Chart |
News |
is up against an area
of overhead resistance. If it stalls out in here, it looks like it has the
potential to resume its longer-term downtrend. Look for buying opportunities in puts and put spreads
here, but wait for signs of weakness.

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Oil service
$OSX.X |
Quote |
Chart |
News |
, mentioned
recently, still looks vulnerable. Continue to look for buying opportunities in puts and
put spreads here.

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Looking Ahead

For you
OEX traders, the VIX is beginning to get stretched to the downside away from its
10-day moving average. Begin watching for strategies which seek to capitalize on
an increase in volatility.

Best of
luck with your trading on Monday!

P.S. Reminder:
Protective stops on every trade!

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