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