This VIX has spiked higher this morning as we have a rollover in the futures contract for the ES, which is the only reason why you see an all-time high print of 5,196 on the Futures charts that's first in this newsletter. 

If you look at the ES on a weekly basis all the way back to when the market made highs at the start of 2022, we are now on the verge of a 1 to 1.618 expansion, which would bring the market to around the 5,615 price point. This price area is right above the 1 to 2.618 expansion area that correlates to the move on a daily basis dating back to the highs in the market in July of 2023, to the run that began in October of last year. If the market does make it up to the 5,400 to 5,600 price area, then look for this to be a large area of resistance. 

I think we have already begun to roll over for a slight pullback and consolidation around this price level. 

The VIX has been making a series of higher highs and higher lows all the way back to December 12th when it made a low of 11.81. 

Inflation has gotten sticky, just as many had expected earlier on, but that does not mean that the Fed must stay at 5.25 - 5.50% range, they probably have room to begin cutting in the next few months and they will still be able to make the reasonable case that they are still in a restrictive policy and still have work to do. We get CPI numbers tomorrow at 8:30am ET for the month of February. We also get PPI and retail sales on Thursday, as well as Consumer sentiment on Friday.

Chart from Bloomberg

 

Options Trades: New Bearish Trade in ORCL for earnings out Monday night.

We are going short ORCL with an options trade around earnings tonight, and we are going bearish. This market looks jittery with the VIX showing signs of participants paying up for insurance premium. We are selling a credit call spread above the market, looking for ORCL to trade flat to lower after earnings tonight. 

The market is pricing in almost a $10 move in either direction around earnings tonight.

We are selling a March 15th ORCL Credit call spread from $123 to $125. ORCL is currently trading at about $114.

Sell the March 15th ORCL $123 Call

Buy the March 15th ORCL $125 Call

This should result in a credit of about $0.40 right now with ORCL trading just above $114. Don't take less than $0.35 for this trade.

This is a bearish trade and we are risking $160 to make a maximum profit of the $40 we collect upon initiating the trade. We are risking $4 for every $1 in potential profit. This is a high-risk trade.

Equity Trades:

Long 1/2 position in DIS at $98.75. Disney is trading at $111.79. DIS is trading higher in a negative market day, continuing to show strength to the upside. 

We have Dick's sporting goods (DKS) out with their numbers later this week, along with the Dollar stores, ADBE, and many others. Stay tuned for updates!

 

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