Hey Options Trader,

In this week’s newsletter I’m going to reveal the most important indicator for market direction I look at. I have never revealed this yet, so this will be the first place I have ever talked about it.

This indicator is the reason I win 96% of my trades and why I usually know which direction the market may go.

Here’s the breakdown of what I’ll be sharing:

1. The directional indicator that determines where the market may be going and how much capital should be allocated.

2. Overall S&P 500 (SPX) analysis

3. My 3 top stock picks in my portfolio and what strategies I would deploy at this point

4. Future market risk events!

My Favorite Index Indicator ($VIX)

This right here is the Volatility Index. It basically shows you the level of fear in the S&P 500. The average is around 15…it’s currently trading around 20 which means there is elevated levels of fear (probably due to election uncertainty).

The levels I keep track of:

10-15: No Fear, Risk On Environment (I like to have 25%-50% of cash ready on sidelines)

15-20: Above average fear (25% or less cash on sidelines)

20-30: Alot of fear (Im usually fully invested at this point)

30+: HOLY SHIT WE ARE CRASHING! (Putting new cash into my accounts to deploy)

For an options trader, the more fear their is, the more expensive the options are. Thats why I love selling options and collecting fat premiums when the market is fearful. People overpay for fear based products.

Like Warren Buffett said “be greedy when others are fearful, and fearful when others are greedy”.
With the VIX trading at 20 and the market making new all time highs, this let’s me know we most likely have another big push upwards coming if VIX drops. We may see a couple drops in between now and the election because fear is still pretty elevated, but with rates coming down, election fears subsiding, and inflation meeting expectations I think this is a prime opportunity to position yourself for another year of UP!

S&P 500 Analysis

There’s a good chance we see the S&P 500 (SPX) at $6000 by end of year. Everything is lining up to be a huge continuation of this bull run. Selling options gives us an edge because it doesn’t matter where the market goes, we can make money in all directions.

For instance, during 2022-2024 the market saw 0% returns. Average investors who bought and held during that time didn’t see their portfolio do anything. Option sellers collected premium that whole time!

$NVDA

Nvda Testing new all time highs

My Top Trades On NVDA:

• Sell 125 to 130 puts about 30-45 days out

• Sell 150 Calls against 100 shares

• Would not buy stock at these levels

$PLTR

This stock has gotten away from us. Way to high to buy here, but still believe this company can push higher.

My Top Trade On PLTR:

• Sell 36-39 strike puts about 30 days out

• Would not buy stock at these prices

• If stock trades down to 37, would buy LEAP call options 340 days+ out at 33 Strike (proxy for owning shares)

$GOOGL

Google seems to be the best value stock to buy right now. PE ratio is below 25 and the stock is down 20%+ from all time highs.

My top trades on GOOGL:

• Purchase 100 shares $164 and sell the 175 covered call 20-30 days out

• Sell the 160 puts 30-45 days out

• Sell at the money puts 165 30-45 days out (Higher Risk, More Belief In Stock)

What awaits us this week:

Jobless claims may provide a little more volatility in the markets this Thursday.

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-Ryan