Here We Go, the Market is Up - VIX & SPX Review 9/10/2022

The market this week made no sense from a fundamental standpoint.

Federal Reserve Chairman Jerome Powell spoke on Thursday and re-confirmed that the Fed will continue to raise the interest rate and tighten the market, yet unlike last time, the market went up.

VIX Related Indices

The Percentile Rank (PR) of “VIX / VIX Related Index” ratios remained above 50%.

The Percentile Rank (PR) of VIX, VIX9D, VIX3M, and VIX6M dropped to the 40% range.

In case you are interested, here is more information about why it’s a good idea to monitor these VIX indices.

The VIX table for these calculations is now automated and available here.

S&P 500 Technical Analysis

The market approached both the secondary trendline and the 61.8% Fibonacci retracement level. Both should act as strong resistance and if they are broken, S&P 500 could be back to the 4,170 level.

A gap was formed on Friday so it might get filled in the near future, but it is very difficult to say which way the market will go next at this point since it is touching so many support and resistance points.

My Personal Thinking

I will not initiate any new directional positions at this point until there is a clearer picture of which way the market might move next.

I will continue to hold the VIX options positions that were opened during the recent VIX spike. If the market moves sideways, these positions will benefit from time decay.

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Tony

I have been trading options since 2010 and have been testing and experimenting with various trading styles. Fundamental Analysis based, Technical Analysis based, Trend Following, Day Trading, Swing Trading, etc.

My primary option trading strategies incorporate volatility and I am constantly experimenting with various trading strategies to improve my PNL.

I hold two Master’s degrees (MSc and MBA) with career experience as a cancer research scientist and a digital marketer.