[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS82WVMzTGpKdTZtTQ==[/video_player] Another muddled day from the markets. There’s so much liquidity that volatility is being squeezed out of the markets. The question we have to ask ourselves is what happens when the markets turn their backs on central banks around the world? At some point can the central banks throw everything they’ve got at the markets and have it still not make a difference? Let’s take a look at this scenario tonight…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9uelNIVXJnZTF2SQ==[/video_player] Signs of volatility slowly slipping into the market. The overall market continues its sideways move as it has over the last 2 weeks. Tonight let’s look at a few canaries in the coal mine and a trade set up…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS8xMERTWHR1ZHlhQQ==[/video_player] Even if you think bad news is good news because the Fed will start another round of QE the risk continues to be to the downside. I’ve made my entire trading career around selling volatility and collecting premium. I have never seen volatility this low. With all the risks out there in the market you will lose over time trying to sell premium. TheoTraders know when the trade isn’t there because this will save us money over the long duration. TheoTraders take calculated risks. This is not the time to do what you’ve always done because it’s worked in the past. This is a different market and at TheoTrade we are going to walk you through the mine fields. Selling premium is a trap right now. TheoTraders don’t fall for market traps. This is what TheoTraders do…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9tdlJXclhkZ21NTQ==[/video_player] After hours today AMZN & GOOGL reported earnings. Both companies beat their expectations and have moved close to 1 standard deviation to the upside. As we have talked about if you look at earnings trades over 1000s of occurrences there is no statistical edge in Iron Condor trades. However, there is an edge in placing a trade in the direction of the stock and overall market trend. We have seen that to be true today for AMZN & GOOGL. Let’s also take a look at overall market and what to expect tomorrow…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9BR2lWQ19xOXYzSQ==[/video_player] Earnings season in full force as stocks like Facebook rockets higher based on earnings news. There was little news from the Fed announcement today. The market has become sensitized to the veiled threats of increasing rates. If we look at the Fed watch tool we can say market is expecting a low probability of a rate hike in September. This lets the market know what to expect going forward. Tonight let’s look at one strategy I like during this market environment…

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9Dd1pyeTYzMFZRVQ==[/video_player] Index products are converging with one another and this yet another example that we are about to enter into a period of extreme volatility. Let’s take a look at historical volatility over the last 20 years. Notice that all of the “all time highs” in the last 20 years also had just entered a phase of extremely low historical volatility. The current trend of historical volatility is higher. At times we have to look beyond today or this week. Yes the market is drifting higher, but volatility will not show up on your screen until after an event! It’s our job to anticipate volatility ahead. That’s what we will do in tonight’s market analysis.

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9WOUROTzVWbWdlcw==[/video_player] It’s earnings season and we kick off with the grand daddy of them all – AAPL! Many think that around earnings you should only sell premium. That is plain old stupid advice given by those that don’t know any better. Let me tell you right now that trading earnings is not a bathrobe. One size does not fit all. For some stocks it does make sense to sell premium and others it will make sense to buy premium. Let’s zoom into AAPL and take a look at the actual distribution curve vs. the theoretical distribution curve. Do the markets have it correct based on the actual historical distribution or is this a case of theory not equating to reality?

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS80a1hON1hkZjNwUQ==[/video_player] Earnings season has kicked into high gear. How do you know whether or not to sell premium on high implied volatility stocks going into the earnings announcement? The trading technology out there focuses only on theoretical probabilities. However, what if you looked the actual historical probabilities based on historical data? Would theory match reality? TheoTrade is about to break the mold in trading technology. For the first time ever this technology will be available to the public exclusively to TheoTraders! The idea that you should sell premium just because implied volatility is high is an antiquated notion. TheoTraders don’t make trading decisions based on myth. Watch TheoTrade technology in action!

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9tcFpwM3NpdHdUQQ==[/video_player] There are two types of market that we have seen over the last several years. They have been either quiet and trending or sideways and volatile. It seems to me that markets may have broken out in another quiet and trending market. With volatility we like to use a combination of calendar spreads and directional trades to take advantage of this kind of market. Let’s take a look at the kind of trades to look for over the next few weeks ahead.

[video_player type=”youtube” youtube_remove_logo=”Y” width=”853″ height=”480″ align=”center” margin_top=”0″ margin_bottom=”20″]aHR0cHM6Ly95b3V0dS5iZS9IUk1JRUFtc2I5TQ==[/video_player] It’s not a rally, it’s just a slow grind to the upside on very light volume. One interesting stat that came out today that the last 3 weeks saw the fastest collapse in the VIX in its history. There are plenty of contrarian candidates out there to choose from. Tonight let’s set up a trade in one of them…