Disclaimer
This is for informational purposes only.
Discussion
Trade: Closed the September $440 SPY puts.
Trade 2: Opened a position in October 27 $445 SPY puts.
Rationale: I continue to ignore my signals to my peril. Last week near the lows I flagged how HY CDX was acting like it wanted to fall and BTC was spiking, I acted on it, yet got back in on Merlin Capital’s signals. I try to take in as much information as possible, but it’s becoming to my detriment. My own read of the market, while far from perfect, is what I need to trade on exclusively.
Today, while defensive sector outperformance is decisively bearish, VOL continues to fade over the course of the day. HY CDX is not imploding in bullish fashion, but it’s not negative diverging either. So, I’m respecting the signal from VOL and will look to reload the September puts into a rally expiration likely tomorrow morning ahead of CPI Wednesday.
Rationale 2: (Writing this the morning of 9/12) The rally appeared to be expiring toward EOD due to lack of decisive bullish confirmation from VOL with VVIX flat alongside a rallying SPX, and decisively weakening breadth into the afternoon.
Again, ruthless with signals. When I see something that’s confirmed by my gut (i.e. when I’m sitting there saying to myself “you know you should act on what you see right here), I’m going to act. The extent to which I act will be dictated by the broader cross-asset market backdrop. More to come on this in a Trading Journal strategy note.