Time to Buy Volatility
As we mentioned in our alert earlier this week, artificial market forces seem to be keeping stocks propped up going into quarter’s end. But a different picture is manifesting itself in the underlying market technical indicators.
While April is seasonally a good month for investors, we believe these technical factors will lead to a bumpy start to trading as the new month begins. Various sell indications are starting to appear and investor sentiment, by some measures, is becoming overly bullish. We believe the virtually uninterrupted move higher from the February low will be tested and it is time to buy volatility at these discounted prices.
These new buys will complement the exchange-traded funds (ETFs) we bought last week. When you receive this special alert, buy to open iShares Russell 2000 ETF June $110 Puts (IWM160617P00110000), which last were priced at $3.25, and iPath S&P 500 VIX Short-Term Futures ETN May $18 calls (VXX160520C00018000), which last priced at $1.48.
Jim Woods is a 30-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.
His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. Read more about Jim Woods.
