$SPX Market Melt Up Or Crash Plunge Ahead, Here's My Take

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Hey Options Trader,

I hope you have been enjoying your portfolio gains…we may be headed for more with the Christmas rally underway. Although, be cautious at the levels i’m about to show you because a smack in the face is getting loaded up right now for the average investor.

Here’s what we are covering:

1. $SPX vs $QQQ - SPX Leads For Once, But Why?

2. $VIX - Fear levels to be aware of

3. $PLTR - How I plan on getting into Palantir

$SPX VS $QQQ - Why is the S&P 500 Leading?

With the fed lowering interest rates from all time highs, tons of smaller cap companies and banks are outperforming tech companies. They have been beat up for a while and now institutional investors are buying those companies.

This is called Sector Rotation. When a specific sector of companies such as banking stocks, get hammered downwards for along period of time, institutions rotate into those overlooked sectors.

The S&P 500 ($SPX) is benefiting more from this as it has a bigger basket of banks and mid-large cap companies. QQQ is more tech heavy.

My thesis is the momentum will rotate back into $QQQ mid year 2025, that’s why I am still long this index.

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$VIX - where is the FEAR?!

VIX hit a new monthly low today of $13.80. We are approaching the ZONE OF GREED which is sub $12. If you look at the chart, you can see on the left that we stayed between $10-$13 for two months back in May…

So it’s not guaranteed that we crash right when VIX hits the low zone.

What this means is that there is a greater risk of the market pulling back than not.

How am I playing this?

Im currently still 85% invested and long stocks. Once we start approaching sub $12 on VIX, I will be putting on some Bear Call Spreads on QQQ to make some quick money on any pullback. I will also shore up cash when my options positions expire on most stocks, except for GOOGL (still yet to hit all time high).

$PLTR - This stock keeps running away! How I plan on getting in

Palantir seems to have no shame in going straight up. With a high of $63 im definitely not buying at these levels.

I currently have the 54 Puts I sold, but I do plan on adding shares once we hit $56-$58 dollars per share again.

There is a good probability this will happen as we are both overextended on the Relative Strength Indicator and the Bollinger Bands.

Exact Strategies For Getting In

Stay safe trading!

-Ryan