🚗Big Tech = Big Story

[] [The daily rundown of everything happening at Option Pit.]( [/campaigns/org775804783/sitesapi/files/images/774695510/MTC_fstp_ad.png]( MARK-et Open Hey OP Crew, Vol Man here with my weekly analysis. For the most part, there was better inflation news this week. That was enough to keep stocks in yet another 1% range for the week from the close to close of the week. From what I can see, that’s nearly 6 weeks with the market not finishing outside of the range of 1% from a Friday to Friday. We go down then back up, down then back up. There’s no real momentum anywhere, as the traders are stuck with a stock market beholden to Fed policy. [ SPX daily price action over the last 3 months, with realized volatility on the bottom chart Add to the mix the ridiculous row over the Debt Ceiling and holding spending to the record level of 2022. The fact that this is a problem is just another symptom of government dysfunction. This adds to more future uncertainty. [ Closing VIX curve, May 12, 2023 The uncertainty is priced into the VIX future curve with back month volatility very high relative to the lower shorter term IVs. With back month premiums higher and a lack of real SPX momentum, VIX is just chopping in a range: [ VIX 10-day chart with 1-minute candles. A 1 point range for VIX on the week is crazy low. By definition, a 17 VIX means stocks should move somewhere, anywhere – and that hasn’t been the case lately. The overhang of news is keeping any real momentum going except in Big Tech, which is the current refuge of all dollars into equities. That could be a big vol event when dollars start to leave Big Tech and find other stocks. The long/short pair ideas still work fine as long as the expectations are modest. Mark and I closed another [Trading Desk]( pair this week for 39% win. Given current moves, 16 VIX is probably as low as we see next week with another lackluster SPX performance. Let’s Go! [/campaigns/org775804783/sitesapi/files/images/774695510/ag (2).png] Pit Report: FITB Not a Fit Banks are back in the news. Regional banks are crashing due to deposit withdrawals. It appears the Fed is making a hash of the problems it created forcing banks to hold large amounts of US Treasury Bonds on their balance sheets. There have only been a few bank failures. However, the big question traders are asking is if there will be more, and when. Does Fifth Third Bancorp (Ticker: FITB) have a volatility story to tell? [ 3 month chart of FITB with implied volatility below [Click here to find out.]( - AG Profits In Pumps: QQQ Pullback The Invesco QQQ Trust (Ticker: QQQ) has had quite the rally. Bottoming out at $260 at the beginning of the year, it traded a high of $327 on Friday. Remember the cup and handle I talked about? It has pretty much played out as it should. [ The bottom of the cup is $260 and the rim of the cup is $297. You take the difference of the two and add it to the rim and that is how high the stock should go. That comes in at $334 which lo and behold is the previous high made on August 16, 2022. That previous high is a natural resistance level. So will QQQ trade $334 or is it ready for a pullback? [Continue here and I’ll tell you what I think and how to play it.]( - Licia OPTION PIT GLOSSARY [( There are plenty of terms in the trading world that need defining. The [Option Pit Glossary]( is here to help. Today's phrase is: Butterfly spread: A call or put spread trade where the trader is long 1 option, short 2 options, and long 1 option. The short options are equidistant and between each long option leg. The trade is generally opened for a net debit. [( DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. 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