Option Professor-Stock Market- With VIX 14 Handle? Time to Locate the Rip Chord? Read It.

June 3 2023

We got a lot of data to chew on this week from ISM numbers to the Jobs & Jolts Reports. Job OPENINGS rose to their HIGHEST level since January as we EXCEEDED above the 10 MILLION job openings at the end of April. In the Jobs Report, we expected LESS than 200k jobs and we got MORE than 300k jobs-a huge beat. Wages are up but not going thru the roof. Conclude- people are working, making money, spending. EARNINGS came in just 3% lower rather than the 8% drop expected in Q1 BUT we have seen changes in Q2 that will be reflected in JULY reports. We suspect that if you back out the delirium over AI and 7 stocks, you will find out many companies are seeing consumers pull back (COST DG for two).

Technically, we are watching 2 things very closely. We see the VIX made a 52 week LOW this week and has a 14 handle. We also are looking at a Fibonacci 61.8% retracement of the S&P 500 high at 4810 and low of 3491 coming in at just ABOVE 4300 (SPX). Inflation data (CPI) is one day before Fed meeting (skip?).

REVERSION to the mean happens all the time as markets ultimately correct. VIX/Fib retrace and the FOMO feeling of this week has us looking at PROTECTING portfolio valuations prior to CPI & Fed Meeting

Do you know the strategies used to HEDGE against Downside risk AND Upside Surprises? We should talk. Go to optionprofessor.com, Submit your information and we will REVIEW your markets and hedging ideas

Jim Kenney

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