Bitcoin Has Legs Like Gisele
05/21/2024
Hey Trader,
Bitcoin broke higher to kick off the week. After retaking 70,000 I see Bitcoin and its counterparts break out the catwalk to retest the highs.
Bitcoin has volume profile support to show traders love bitcoin at these levels. Also, some of its counterparts have Voz-Coded trade setups that are ready to EXPLODE! Plus you can buy options in these...we LOVE THAT, RIGHT? 🤩
COIN crafted a descending wedge pattern...which descending doesn't sound encouraging to bulls. IT IS. This is a pattern that coils so tight on a downtrend, it springs up and explodes when oversold.
It sounds too easy to spot, but it really isn't. This isn't just sold plain on downtrend, it is downtrend with so much pressure it makes a diamond. On the flip, normal downtrends can fiercely follow through even lower or just peter out and consolidate into dust.
COIN is trading at 225. My upside is 250.
Another bonus trade I'll throw you is RIOT. RIOT has a mini wedge breakout, but also complete lack of volume above. That means if this thing holds momentum over its 200 day moving average, we'll see RIOT in the 15's. It's currently at 10. That'll be one heckuva move.
In the meantime Mark and I have been cleaning up shop with the Closers. We're currently crushing it with the directional bullish bet we entered at the start of the month, anticipating the market to continue higher!
This Friday, May 24th, is our Free Friday Trade to Close show!
And sometimes we drop free trades…
That’s right!! This week our Trade to Close show is open for FREE for anyone who wants to see how we hustle to make BANK every day!
Use this link to access our live stream on FRIDAY at 3:00 pm ET.
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Can’t wait to see you then!
Volatility Spotlight
By Mark Sebastian
On Friday the VIX closed at 11.99.
On Monday, 12.15…but volatility was down. Remember adjusted for the weekend the model that produces VIX generally should have it up about .7 points….It closed up .16
With NVDA earnings coming up, what is causing VIX to drop so profoundly?
The answer is 0 DTE (days to expiration) options.
Look at all the near the money option volume:
This paper is primarily selling premium.
With market makers getting this stuff DUMPED on them on a daily basis how do they cope?
The answer? They sell something else.
They sell options that expire tomorrow, Friday, next week.
Anything they can because:
They do not want all that long premium exposure.
They know they will get to buy it back on the day those options are expiring.
This action pushed the VIX lower. DESPITE the event risk.
We have seen consistently that premiums are too low into event risk. Last week's CPI was priced in 40 points. We moved 60.
The FOMC priced in 52 points and we moved about 80.
Non-farms…same thing.
They are begging non-market makers to buy something because they have so much near dated long premium exposure.
I worry that one of these days traders won't be there to sell on the day of expiration…maybe they will actually buy.
When Goldman or Morgan Stanley see this…they will probably sweep the book.
That is how we get a quick move lower…or higher.
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