Jan. 27, 2025 Option Outlook
Market Moves Show
Good Afternoon! I apologize for the delay, but with the market providing us such a strong pre-market move, I needed Volland to catch up before I posted so that I had a good look at the market.
On our weekly show,
and I were joined by Andrew, our resident expert in combining Volland with ORATS data for a powerful edge with earnings plays. We also discussed his weekly plan and the impacts of FOMC.Watch the replay here:
The market dropped considerably, in the premarket after pinning to the 6100 strike last Friday, something that avid readers knew we anticipated. The sentiment in this newsletter was that the market needed to hold 5900 to buy the dip. Overnight we reached the equivalent of 5910 and bounced. At the time, we were strongly overvixed, and the market was putting in a bid to activate the overvixed signal once again. Is this still a buy the dip opportunity?
The short answer is yes, this is solid opportunity to buy the dip. Even if the market doesn’t activate the overvixed signal, we can see a little bit of a resistance here at 6000 SPX. Ultimately, there is a path getting back to 6100, or at least 6065 SPX over the next 30 days.
Market moves have been quicker over the past couple of weeks, reaching targets before we expect. I expected a small selloff with a chance of an overvixed drop thanks to these catalysts this week, and we got it just before all the catalysts. I expected to reach 6100 last week, and we rushed there only to end the week at 6100 anyway. At this point I wouldn’t be surprised to see a trip to 6065 before FOMC, then a small bump up after it, not because I think they will be fundamentally dovish, but because there’s so much support at this time. 6100 is the target for 0-30 days until expiration, but don’t be surprised if it is reached by Friday.