30-Second, Post-Election Review
If you don't follow the market every day, it is nice to get a review.
After the U.S. election, the S&P 500 ticked up.
With a Trump Administration expected to be more favorable toward crypto, has rallied to a record-shattering high near $92,000.n n
We covered crypto seasonality in last week's Cherry Picks. We discussed November crypto seasonality and showed how historically, that month can be extremely favorable for Crypto.
Meanwhile, the EUR/USD currency pair continued its decline, indicating a strengthening U.S. dollar relative to the euro.
The stock Sectors that have moved the most since the election:
The following exchange-traded funds (ETFs) currently have relatively high volatilities. Below we've listed the ETFs from most volatile (SMH) to least (XLB).
SMH - Semiconductor ETF
GDX - Gold Miners ETF
OIH - Oil Services ETF
XME - Metals & Mining ETF
XHB - Homebuilders ETF
XRT - Retail ETF
XLF - Financial Select Sector SPDR Fund
XLB - Materials Select Sector SPDR Fund
The tutorial can be found here.
NVDA ($149) iron condor (DEC) $3.96 Credit
NVDA is the last of the Mag 7 stocks to report earnings, coming on Nov. 20 after the close. The stock is at all-time highs and vol has continued to expand. If you think it might be a bit overdone here, or at least maybe time for some chop, try an iron condor in DEC. Short the 125/110 put spread and the 165/185 call spread trades at around $3.96 with a 62% probability of profit.
UVXY ($20) ZEBRA (NOV29) $3.26 Debit
Volatility has come down to near lows, with the VIX sitting below 15. We've gotten the election out of the way, monitored rate cuts, and analyzed most of the earnings reports. With Santa on the way, what could possibly go wrong? If you think maybe there is some mean reversion in volatility in the near term, a ZEBRA trade is a cheap synthetic stock position. In this case, go long 2x the 19s and short 1x the 21 in the 17 DTE to capitalize on a little bit of volatility into the end of the month.
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Michael Rechenthin, Ph.D., (aka “Dr. Data”), managing director of research and development, has 25 years of trading and markets experience. He’s best known for his weekly Cherry Picks newsletter. On Thursdays, he appears on Trades from the Research Team LIVE.
Nick Battista, tastylive director of market intelligence, has a decade of trading experience. He appears Monday-Friday on Options Trading Concepts Live. On Wednesdays, he co-hosts Johnny Trades. @tradernickybat
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