The VIX is 30 days out. You’re watching it every morning and making decisions off it, and the whole time it’s telling you what the market expects a month from now. The VIX is fine, but it’s not in the here and now, and it’s not a great indicator like it used to be. So what do I look at instead? Volatility futures, and I’ll tell you right now we’re going down the rabbit hole pretty far on this one, so stay with me. Pull up the term structure and you’ve got contracts expiring at different points in time, say a 23-day sitting next to a 51-day. What matters is the difference between the two of them rather than either number on its own. That difference runs about 70 to 85 cents in a normal range, and what it’s telling you is the intensity of volatility right now against a

Go pull up a chart of the QQQ on the max setting. Put the Dow right next to it. Find March 10, 2000. NASDAQ tops out at 5,048. Now walk it forward and watch what these two do. Tech starts coming apart. And the Dow goes higher.  Money leaves the red-hot stuff and shows up in financials, industrials, energy, materials. Day after day it’s the same picture on your screen. NASDAQ red, Dow green, money moving from one side of the room to the other. You know what everybody called that at the time? Healthy. The money’s not leaving, it’s rotating. So what happened?  The NASDAQ dropped 78% over the next two and a half years. The Dow gave up about 37%. Nobody got saved by the rotation. It just moved the pain around for a while. And look at the bounces in there. Wicked violent rallies inside a market

I was on Schwab Network this morning for the Big Three. Three stocks, three trades. All three are the same trade wearing different clothes. Every one of them is a fade. Somebody is bidding, and I want the other side of it. Here’s the shape of each without the names attached. The one that ripped on an AI headline. A big name in a group that’s been oscillating back and forth for months. Good news came out, the crowd piled in, and I think it’s got its feet back under it. I also don’t think it lasts. So I’m stepping in and fading it in the near term. Any opportunity I get to sell what looks like a top over here, I’m going for it. These oscillations are great for the traders. The IPO everybody thinks they missed. I hear from traders constantly who feel locked out of this one.

The S&P has spent almost 80 days going nowhere. Same range since early May. May, June, most of July, all of it channeling inside the same box. Most people call that indecision. It’s not. You’re not stuck because buyers and sellers can’t agree. You’re stuck because of open interest. Zero DTE — options that expire the same day — is now more than half the volume. We do about 68 million contracts on an average day. Call it 30 to 40 million of them getting rolled forward, over and over, into the same strikes.  You trade the same strikes day in and day out at that kind of size, you don’t just pile up risk in one spot. You lock the market in that spot. I’ve been talking about this since the early ThinkOrSwim days. Back then I called them gravity points. Name still fits. It’s the price the whole

Market breadth sucks. That’s not me being dramatic. That’s the actual state of the tools most people use to read this market, and they don’t work the way they used to. You’ve been taught that a negative advance-decline line, meaning more stocks going down than up, tells you the market is weak.  You’ve been taught that ticks and breadth tell you what’s really going on under the surface. For most of market history, that was true. Watch what happens now. This morning the market was moving up while the advance-decline line went negative.  You can literally sit there with 10, maybe 15 stocks trading to the upside and still have a marketplace that is incredibly hot. That’s how screwed up we are. How is that possible?  Because a handful of multi-trillion-dollar organizations, with the heavy order flow that follows them, are the whole market now.  When memory and chip stocks

Before the cash open the S&Ps were off by 1%, the NASDAQ off by 2%, the Dow and the Russell each down a percent. The hit was coming across the board. Then we did something unusual. We closed at 7533 on the SPX and opened smashing through the lower edge of the expected move, ripping through it like just a knife through butter. We already said screw the expected move. We shattered through it. The NASDAQ breached 29,000 too, and that level has been big reactionary lows inside a really tight channel. There’s not a lot of places to run to. There’s not a lot of places to hide. The financials got smoked into the cash open. Google’s getting absolutely smoked again. Turns out they suck. Like we didn’t know that. Microsoft, back under 400. They definitely suck. Big hit to Meta and Nvidia. The energy sector is up, but

I was on Schwab Network this morning and walked through three setups I’m watching right now. First one is a home improvement name that’s been channeling around the same price for months, but it looks ready to break. We’re talking a potential move down to levels we haven’t seen in three years.  The interest rate environment is working against it, and the technical setup is screaming for a retest lower. I showed them the exact put spread I’d use to play it with defined risk. Second one is a consumer staples play that everyone rotated out of earlier this year. It’s been stuck in a tight range, but I think the market’s about to rotate back into it.  This one’s bullish, and the way I’m structuring it, the downside is minimal. But if it snaps back into that channel like I think it will, the upside is sitting there clean.

The consumer price report came out soft this morning, and it didn’t mean squat. I know how that sounds. We watch the CPI all morning long. It’s the number everybody braces for. So watch what the market did with it. Take a look at oil. Oil’s ripping again, up overnight, and nobody cared about the inflation print sitting right next to it.  The number came out, prices fell more than expected, and the tape barely blinked. That was your CPI report, ladies and gentlemen. It meant almost nothing. This is the trap. You circle the data on your calendar, you decide that’s the thing that moves the market, and then the number hits and the market shrugs.  The event was never the driver. You were just told it would be. So if the data isn’t driving, what is?  Go look at the tape, it tells you in about two seconds. 

For thirty years you were taught to check the futures before the bell. S&P futures, NASDAQ futures, first thing, every morning. If they were red, you braced. If they were green, you relaxed. A lot of you have a couple of rings around your tree, and that reflex is baked in deep. Stop looking at that crap. I’ll say it plainly, with all due respect to how you were trained. What the futures say pre-market hasn’t meant much to any given session in a long time.  This morning was a perfect example. The S&P opened down 0.3%, the weekend headlines made it sound like all hell was going to break loose, and by the open the advance decline line was stellar. Seventy advancers against a red tape. The pre-market told you nothing. It lies now for a simple reason. You’re staring at three products in the pre-market, and they’re heavily

Look, there are two seats at every trade you’ve ever made. One guesses, hopes, and pays up. There’s a name for that one. It’s the mark. The bottom of the food chain, where everybody above you takes a cut. You’ve been sitting in that seat your whole life. So have I, for years. And it’s not because you’re bad at this.  You did your homework. You picked what looked right. You were sure this time, and it went against you anyway. It was never you. It was the seat. I went live earlier today and spent the whole session on the other seat. The winning one.  The seat Citadel sits in, the one Jane Street and Virtu sit in, the firms on the other side of almost every order you’ve ever placed. They don’t pick stocks.  Those people don’t guess which way the market’s headed. Most days they’re not even