The closest thing to a crystal ball

Before the market even opens I can tell you how much the S&P is going to move that day and you can do it too in about five seconds. First I want you to pull up the VIX and then you're gonna take gonna divide it by 16. So let's just say the VIX is 16 right now. That implies roughly a 1% normal daily move in the S&P. With the VIX at 24 that's a 1.5% implied daily move. And let's just say the VIX climbs all the way up to 32 that is a 2% implied daily move. And this whole calculation works because VIX measures annualized volatility being priced into S&P options. So dividing the VIX by roughly the square root of trading days in the year this converts the number into a one-day move. And this is a very handy trick because this gives you a professional way to read the market without pulling up an options surface. So here's how you're gonna use it. If the VIX is 16 and the market is down 40 basis points about half a percent stocks are gonna be in the red but the move won't be unusual. But let's just say the market drops 2%. That is roughly two times the normal daily move being priced in. So now I care and you can because the market is moving much further than the vol level suggested it should. And this is when we consider changing our positioning not because is red or green but because the market is telling you that the underlying assumptions have changed. This could be a policy shift it could be currency intervention it could be the treasury buying more bonds. And this is the quickest and easiest way that we can ignore noise and know when we should be paying attention. Now we've adjusted our positioning based on this signal just a few days ago. And this is in our energy precious metals and equity. If you want to see exactly how we're trading it right now we send our ideas out to 70,000 subscribers every single and I'll send you the link. Comment “LETTER” for our full market analysis. Educational only. Based on hypothetical model results, not actual trading. Subject to assumptions and limitations. Not indicative of future results. Not investment advice or a recommendation to buy or sell any security or futures contract. Check the range trust me your trading's going to change