The grind continues.
I know I’m beating a dead horse here, yet it’s all I can talk about right now.
Volatility is at lows we’ve not seen in a decade. 10 day HV is under 2.5%, and the VIX just recently broke to new lows.
Correlations are also in the gutter. KCJ, the CBOE Implied Correlation Index, is at the floor. So while the market has gone sideways, underneath the surface rotation still happens.
We’re out of earnings season so I’m looking to fade some of the more recent movements as these stocks establish new equillibrium levels.
Trade #1: AMZN
AMZN had a large failed breakout after earnings, and is currently forming a bear flag. I’m looking for the second push lower to start fading this move.
Expected Price: 955
Sell to Open AMZN Sep 900/895 Put Spread
Tier 1: Open at 0.80, Close at 0.30
Tier 2: Open at 1.10, Close at 0.80
Tier 3: Open at 1.40, Close at 1.10