Another sell off 'slow motion style', with an increasing VIX (upto 22.57 intraday). This is beginning to look like Christmas soon!
The big issue today was the SKEW hit 141.18! That is a huge jump showing every was reaching for out-of-the-money put options. This could signal an intense move in the near future, usually to the negative side. At least real blood shed may trigger a turn around.
I sold more call spreads.
First, about two hours into the trading day, I sold the SPX 2150/2160 call spread expiring Nov9 for $2.15.
Then, I shorted a small position on the NDX expiring today with a 4730/4750 call spread for $1.30 around about 2 hours before the close.
At about the same time, I sold the Nov4 SPX 2110/2120 for $1.20. I needed this to cover the 70 cent cost of rolling the Nov4 2100/2190 put spread to next Monday (Nov7), which I did at about the low of the day. I may need to roll this one again.
Now, everything we look at is getting ready to get bullish. Its just a matter of when!
The MarketForecast finally is buried in a bullish cluster on both the SPX and the NDX, and again on the RUT.
Put/call ratios are at extreme levels both short term and according to a longer term moving average. They can stay that way, but when the fall, it will mark the beginning of a trend we can trade.
With an inverted volatility term structure, and VIX spiking, we just wait for the VIX to fall to 19.57 and the term structure to straighten out, before we can get bullish.
I have time to wait for this on the NDX 4720/4710 put spread (now in the money), as it expires on November 10th. I am not so lucky with the 2130 /2120 (mini-sized - thank you!) that expires tomorrow. I am tempted to roll that UP and out, for less of a debit, so that when the market does spring back, I can recapture most of the $10 wide spread. I will see tomorrow.
In the meantime, I will continue to collect premium on the call spreads until this market is ready to get over its long slow bearish spell.
