Volatility Changed at the End of Last Week

My VIX light was red for the entirety of last week.

But towards the end of the week, on Thursday and Friday, things started to change…

The VIX light uses four indicators to determine exactly where volatility is headed:

  1. Futures curve
  2. S&P correlation
  3. VIX Volatility
  4. CBOE VVIX Index

Red Traffic LightAnd at the end of last week, one of those indicators turned from red to yellow.

Today’s light is still red… but it’s not shining quite as bright as it was before.

On the last two days of the week, the S&P was treading higher…

S&P 500 Nov 2-Nov 8

And so was the VIX.

VIX Nov 2-Nov 8

Typically, the VIX moves inversely to the S&P. When the S&P goes up, the VIX goes down. When the S&P goes down, the VIX goes up.

But as you can see in the charts above, that’s not what happened the past two trading days.

When this happens, it means we could be looking at a potential market sell-off. I’m closely watching the VIX today to see how it moves with the S&P.

My light is still red…but check back tomorrow to see if it changes.

This Energy Stock Is Going Diagonal

We’re looking at a diagonal call spread today on Marathon Petroleum Group Corp. (NYSE:MPC):

Click To Enlarge

You create a diagonal spread by purchasing and selling two different calls with different expirations and strikes.

In this case, one big-money trader sold the December $72.50s to finance the January $67.50s.

This is a slightly bullish trade. The trader is looking for MPC to make a move over $70 and then slow down – and I don’t disagree.

In fact, I like MPC to $72.

Instead of constructing a calendar spread like this trader, I’m simply long the January 21, 2022 $70 calls. As I type, they’re trading for around $2.40.

Elon Can’t Event Hold on His Own Stock

Before I tell you what stocks are on my Watchlist today, I’m going to talk about one that’s not Intel Corp. (Nasdaq:INTC).

And that’s because I took this stock out of my Profit Revolution portfolio today…

For a weighted profit of 140% in four trading days.

Last Tuesday, I noticed that options on INTC were too cheap. So, during my LIVE trading session, I recommended buying the November 26 $50 calls for 78 cents.

And right I was. Because by Friday, those calls had doubled – and I recommended selling half of the position for $1.56, locking in a 100% profit.

That left us with room to ride higher. And this morning, we were able to exit the rest of the position for $2.18 – a 179% gain from the original position.

How did I discover this “too cheap” option?

And how did I know it was going to rise?

Well, you can learn more about this strategy – and how you can join the Profit Revolution right here.

And after you check that out, let’s see what I’m watching today. Any of these stocks could become our next asymmetric winner…

  1. Tesla Inc. (Nasdaq:TSLA)

TSLA was all over the news over the weekend after Elon Musk took to Twitter, asking his followers whether or not he should sell 10% of his holdings.

Can you believe this guy? It’s crazy the way he can move a stock just by typing on a keyboard. Plus, his own brother sold $108 million worth of the stock on Friday.

TSLA opened down 5.8% this morning.

  1. Nordstrom Inc. (NYSE:JWN)

It’s been a rough 2021 for JWN. The stock hasn’t done much of anything – until recently, that is.


JWN has recovered. It’s up almost 11% over the past five trading days. And with earnings coming up around the 23rd, this retailer is back on my radar.

  1. Pfizer Inc. (NYSE:PFE)

PFE is at a crossroads.

The stock soared after announcing positive news on its COVID pill. Now, we ask a question:

Will PFE take off like Merck & Co. Inc. (NYSE:MRK) did after its own COVID pill?

Or will it do the same thing it always does, and fade as soon as the news is fully digested?

I’ll be watching PFE shares closely this week to see our answer.

And that’s all for today.

You can catch me for my LIVE Profit Takeover show tomorrow at 12:30 PM for a quick-hit, 30-minute trading session.

Just click here to add that event – and the rest of our free live shows – to your calendar!

Simply hit “Follow calendar” to be notified before I go live.

See you tomorrow,

Mark Sebastian
Founder, Profit Takeover


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