[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9nWWQ5RWVoeXd0UQ==[/video_player] TheoTraders know how to identify situations where stocks are at an exhaustion and volatility is going to increase. What we like to do is go long calendar spreads in these situations. If you’re new to spreads and calendars check out the Options 201 class: Vertical and Calendar Spread Essentials. You can get this 5 part class here.

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9zYlZvb3FEUlBtYw==[/video_player] Jeff Bierman joins TheoTrade today. Jeff brings his extensive background in fundamental and technical analysis to TheoTrade. He spent 8 years at thinkorswim and then TD Ameritrade. With Jeff’s help TheoTraders are setting up a bearish put spread in GOOGL. TheoTraders are now able to combine probabilities and technicals to create high probability trade ideas like this one…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9zZk5kR1d5VVdLdw==[/video_player] With IV at record lows TheoTraders should not sell premium. All it takes is one volatile week to kill your account. With the record lows in volatility there is only one way volatility can go and that’s up. Here’s how we plan to get long volatility…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9QaWYzYUlZVkFUOA==[/video_player] After seven years of a relentless bull market, and now with super-low implied volatility, traders are getting restless and looking for some two-way tape. When corrective price action does return, it will be accompanied by a change in the “character” of the intraday price action, which can tip us off that cracks are appearing in the foundation of this bull juggernaut. Let’s keep trading in the direction of the trend to keep trades simple, while keeping an eye out for those small changes signifying that things are about to get a lot more fun for those of us that sell options.

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9yenA3Z3docXpzMA==[/video_player] The sector to watch right now is financials which are pricing in more risk in the next 2 days than 9 days from now. What does that mean? It could that financials are giving off the first signs of volatility coming back into the market place. The other place to look is at bonds. What we see is the implied volatility in the bonds higher than the SPX. For those of you who want a fun homework assignment you can do some think back and try to find when the last time that happened. Where do we go from here? I know it doesn’t seem like it, but this might be the most opportunistic time in the market. The calm before the storm.

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9NT2E3SlRpUXQyRQ==[/video_player] The stock market is at record low volatility. What does that mean? Well, if you’re a premium seller you are selling some of the lowest premium ever recorded! That is why we have been using In Out Spreads to take directional exposure to the market. Believe me, I love non-directional strategies, but they just aren’t here right now. If you try them you are on borrowed time and eventually all your winners will be taken out. With In Out Spreads there is no time risk or volatility risk. If you’re wrong in direction you have minimized your risk. Let’s take a look at a In Out Spreads trade…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly93d3cueW91dHViZS5jb20vd2F0Y2g/dj1GMDlzUXVtRVZfMA==[/video_player] Let’s start the week with a look at the all the major sectors. It’s helpful to look at all the sectors on fractal time frames to get an idea of the big picture and where we are going…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9xc3lrb2VTYXpvOA==[/video_player] The jobs report hasn’t moved the markets in a while. Tomorrow will probably be no different barring any major surprise. Let’s look at a few trade set ups for tomorrow. There’s one I like in AAPL that we can set up in tonight’s video…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9maWhWekJZanhLMA==[/video_player] Tops are a process and bottoms are an event. The topping event continues to unfold today as the SPX continues to flat line at all time highs. The first place to look for the market to go is to test the break out level. From there we will know a lot more. Let’s also take a look at what the market expects this week from the unemployment numbers and how that relates to the FOMC decision…