Via Political Calculations blog,

What month will the National Bureau of Economic Research someday get around to saying marked the beginning of the next recession in the U.S.?

The NBER is notoriously slow in identifying when the business cycle in the U.S. either peaks before going into recession or troughs when coming out of one, often lagging behind these events by many months. That’s because they take a number of data series into consideration and will wait until many go through revisions before determining if the national U.S. economy has truly changed direction from growth to contraction or vice versa according to their model of the economy.

Because they’re so slow, analysts have built models to try to predict the timing of when the country’s business cycle has changed when evidence is building that it has, long before the NBER makes its “official” determination. Some of these models are oriented toward recession forecasting. They have been built to use currently available data to try to anticipate the most likely timing of when the NBER will be likely to say the business cycle changed from boom to bust.

In a sense, they’re using models to predict when the NBER’s business cycle model will someday find the U.S. economy went into recession! That brings us to a recession forecasting model whose results we’ve been featuring since October 2022, when a leading recession indicator first flashed a red warning light.

That model was introduced by Jonathan Wright in a 2006 paper while he worked at the Federal Reserve Board. This model uses just three data series to generate the probability the NBER will identify a month sometime between a date of interest and one year into the future. One of those datapoints is the rolling one-quarter average of the Federal Funds Rate. The other two are the rolling one-quarter averages of the yields of two constant maturity U.S. Treasurys, one for the 10-Year UST note, the other for the 3-Month T-bill.

For this data, the red warning light starts flashing when the yield of the 3-Month Treasury drops below the yield of the 10-Year Treasury. This is a clear signal the U.S. Treasury yield curve has inverted, with short term yields paying higher yields than long-term yields. Historically, yield curve inversions have occurred before the U.S. economy entered into recession. Wright’s innovation was to also take the level of the Federal Funds Rate into account, recognizing that how the Federal Reserve sets it in accordance with its monetary policies affects the likelihood of recession.

As of the close of trading on 27 April 2023, Wright’s recession forecasting model anticipates a 67.0% probability the period between now and the end of April 2024 will contain the month the NBER will someday say marked the beginning of a national recession in the U.S.

The latest update to the Recession Probability Track shows how that probability has evolved since our previous update one month ago.

The chart shows the current probability of a recession being officially determined to have begun between 27 April 2023 and 27 April 2024 is 67.0%. Assuming the Fed follows through on hiking the Federal Funds Rate by another 0.25% next week, the probability of an “official” recession will continue rising. Doing some back-of-the-envelope math using our recession odds reckoning tool, with the 10-Year and 3-Month Treasuries as inverted as they are today, the odds of recession will breach the 70% threshold in about two weeks. Even if the Federal Reserve stops hiking the Federal Funds Rate after its Federal Open Market Committee meets to set its rate next week, the odds of recession will breach the 80% threshold in early July 2023.

Analyst’s Notes

Two members of the NBER’s Business Cycle Dating committee have a new working paper in which they indicate Americans should expect a recession in 2023 and 2024. The role Federal Reserve officials in changing from expansionary to contractionary monetary policies looms large in their assessment.

In 2014, current CIA director William Burns had three meetings with Jeffrey Epstein when Burns was Obama’s deputy secretary of state, and after Epstein had been convicted of child sex exploitation, the Wall Street Journal reports.

Burns and Epstein first met in Washington prior to Burns visiting Epstein and his Manhattan townhouse, according to a trove of leaked documents that include Epstein’s schedules which were not contained in Epstein’s “black book” of contacts or flight logs.

Burns, who became CIA Director under Biden in 2021, met with Epstein while he was preparing to leave his position in the government, according to agency spokeswoman Tammy Kupperman Thorp.

“The director did not know anything about him, other than that he was introduced as an expert in the financial services sector and offered general advice on transition to the private sector,” she said, adding “They had no relationship.”

Mr. Burns, 67 years old, a career diplomat and former ambassador to Russia, had meetings with Epstein in 2014 when Mr. Burns was deputy secretary of state. 

A lunch was planned that August at the office of law firm Steptoe & Johnson in Washington. Epstein scheduled two evening appointments that September with Mr. Burns at his townhouse, the documents show. After one of the scheduled meetings, Epstein planned for his driver to take Mr. Burns to the airport.

Mr. Burns recalls being introduced in Washington by a mutual friend, and meeting Epstein once briefly in New York, said Ms. Thorp. “The director does not recall any further contact, including receiving a ride to the airport,” she said. -WSJ

One month after meeting with Epstein, in October 2014, Burns stepped down from this role at the State Department to serve as president of the Carnegie Endowment for International Peace, a think tank. He ran it until he was nominated by Biden to serve as CIA director in early 2021.

Epstein also had dozens of meetings with then-Obama White House attorney Kathryn Ruemmler, who went on to become Goldman Sachs’ top lawyer in 2020. Epstein also planned for her to join him in 2015 on a trip to Paris, and in 2017 to visit his private island in the Caribbean.

According to a spokesman for Goldman, Ruemmler had a ‘professional relationship’ with Epstein tied to her role at law firm Latham & Watkins LLP, and did not travel with him.

“I regret ever knowing Jeffrey Epstein,” she said.

According to the documents, however, they knew each other well enough… following Epstein’s 2006 conviction for sexually abusing girls in Florida as young as 14-years-old.

He asked for avocado sushi rolls to be on hand when meeting with Ms. Ruemmler, according to the documents. He visited apartments she was considering buying. In October 2014, Epstein knew her travel plans and told an assistant to look into her flight. “See if there is a first class seat,” he wrote, “if so upgrade her.”

Within weeks of Ruemmler’s 2014 departure from the Obama White House, Epstein planned an August lunch at his townhouse, followed by a series of meetings to introduce her to his acquaintances.

The two first met when Epstein called her to ask if she would be interested in representing the Bill & Melinda Gates Foundation – a relationship which never panned out.

Epstein and his staff discussed whether Ms. Ruemmler, now 52, would be uncomfortable with the presence of young women who worked as assistants and staffers at the townhouse, the documents show. Women emailed Epstein on two occasions to ask if they should avoid the home while Ms. Ruemmler was there. Epstein told one of the women he didn’t want her around, and another that it wasn’t a problem, the documents show.

Ms. Ruemmler didn’t see anything that would lead her to be concerned at the townhouse and didn’t express any concern, the Goldman spokesman said. -WSJ

Epstein also connected Ruemmler with Ariane de Rothschild, current CEO of the Swiss private bank Edmond de Rothschild Group. Ruemmler’s law firm was hired by the bank to help them with US regulatory matters, according to the bank and the Goldman spokesman.

I have been asserting that Epstein was OBVIOUSLY not a major financier since well before his Florida arrest in 2006.

These leaders are meeting him years after his conviction and incarceration.

This thing appears just *impossibly* fake. I’m sorry. It seems fake. Just fake. https://t.co/vIyjwEshZx

— Eric Weinstein (@EricRWeinstein) April 30, 2023

De Rothschild, who married into the famous banking family, met with Epstein over a dozen times.

In September 2013, Epstein asked Mrs. de Rothschild in an email for help finding a new assistant, “female…multilingual, organized.”

“I’ll ask around,” Mrs. de Rothschild emailed back. 

She bought nearly $1 million worth of auction items on Epstein’s behalf in 2014 and 2015, the documents show.

Mrs. de Rothschild was named chairwoman of the bank in January 2015. That October, she and Epstein negotiated a $25 million contract for Epstein’s Southern Trust Co. to provide “risk analysis and the application and use of certain algorithms” for the bank, according to a proposal reviewed by the Journal. 

In 2019, after Epstein was arrested, the bank said that Mrs. de Rothschild never met with Epstein and it had no business links with him. -WSJ

The bank admitted to the Journal that it lied in its earler statement, and that Mrs. de Rothschild and Epstein met as part of her normal duties at the bank. 

Other notables in the new report include;

• Leon Botstein, president of Bard College
• Noam Chomsky, who was scheduled to fly with Epstein to have dinner at the pedophile’s Manhattan townhouse in 2015
• Anthropologist Helen Fisher, who says she ‘didn’t have anything to do with Jeffrey Epstein, “But I remembered it because of his spectacular house and because of the six young women.”
• Joshua Cooper Ramo, then co-chief executive of Henry Kissinger’s corporate consulting firm. 
• Harvard professor Martin Nowak
• Former Israeli Prime Minister Ehud Barak

More on Ehud Barak, given rumors that Epstein was running a Mossad honeypot operation;

Mr. Ramo also was invited to a breakfast at the townhouse in September 2013 with former Israeli Prime Minister Ehud Barak, another regular guest, the documents show. 

…

Mr. Barak also met Epstein in 2015 with Mr. Chomsky, now 94, a linguistics professor and political activist who has been critical of capitalism and U.S. foreign policy. 

Mr. Chomsky said Epstein arranged the meeting with Mr. Barak for them to discuss “Israel’s policies with regard to Palestinian issues and the international arena.”

Mr. Barak said he often met with Epstein on trips to New York and was introduced to people such as Mr. Ramo and Mr. Chomsky to discuss geopolitics or other topics. “He often brought other interesting persons, from art or culture, law or science, finance, diplomacy or philanthropy,” Mr. Barak said.

When asked about his relationship with Epstein, Noam Chomsky said: “First response is that it is none of your business. Or anyone’s. Second is that I knew him and we met occasionally.”

After Epstein donated $850,000 to MIT between 2002 and 2017, and $9.1 million to Harvard between 1998 and 2008, Chomsky said in a 2020 interview that people ‘worse than Epstein’ had donated to MIT. He didn’t disclose their friendship at the time.

Chomsky said that at the time of their meetings, “what was known about Jeffrey Epstein was that he had been convicted of a crime and had served his sentence. According to U.S. laws and norms, that yields a clean slate.“

SpaceX Chief Executive Elon Musk held a Twitter Space discussion regarding the recent Starship rocket launch. Although the launch experienced several engine failures and other issues leading to a loss of control and activation of the automatic flight termination system, Musk considered it to have met his expectations. He expects that SpaceX will invest $2 billion in Starship’s development this year, with the next launch planned in a few months. 

“The outcome was roughly sort of what I expected and maybe slightly exceeded my expectations,” Musk said, adding Starship was able to achieve flight and a “significant” amount of data was able to be collected, including through maximum dynamic pressure or “MAX-Q.” He said, “Overall, I actually feel like that was a great flight.” 

About 72.4k of Musk’s subscribers tuned into the hour-long discussion last night. Musk offered a recap of the flight. He provided the understanding that troubles began during liftoff when 3 of the 33 Raptor engines either failed to ignite or were aborted during launch. “Those engines did not explode, but the system didn’t think they were healthy enough to bring them to full thrust,” Musk said. 

This is not a render. This is not a simulation. This is @SpaceX’s first integrated test flight of #Starship with the Super Heavy booster, the world’s largest and most powerful rocket to ever fly. This #slomo is from our 8k tracker shot by @considercosmos. pic.twitter.com/srxmuStn2N

— Everyday Astronaut (@Erdayastronaut) April 21, 2023

Musk further noted that a minimum of 30 Raptor engines were required for liftoff, resulting in a noticeable tilt of the rocket as it blasted off from SpaceX Starbase in Boca Chica, Texas, on April 20. 

Musk said the automatic flight termination system took “way too long” to trigger as the rocket veered off course. He noted the termination system would need to be requalified before the next launch, which could be in six to eight weeks. 

“Hopefully, we’ll be ready to fly again in a couple of months,” Musk said. 

Musk said the next Starship launch would have a higher probability of achieving orbit:

“I would be surprised if we exit this year without getting to orbit”… there’s almost an 80%-plus probability of doing so, increasing to nearly 100% within 12 months. 

Musk said SpaceX will spend upwards of $2 billion this year on Starship developments. He said this could all be done without outside funding. 

It appears the world’s largest rocket ever built is set to fly again. 

Authored by Alex Kimani via OilPrice.com,

• Physical nickel markets have become oversupplied in 2023.

• A new wave of supply from Indonesia has put prices under pressure.

• International Nickel Study Group: the nickel market will face a supply-demand surplus of 239,000 tonnes.

Last year,  the nickel markets came into the limelight courtesy of the historic nickel short squeeze that sent nickel prices soaring to an astonishing $100,000 per tonne.

The massive surge doubled the previous all-time high over the course of one morning and plunged the London Metal Exchange into an existential crisis. And, just like the famous copper squeeze of more than a century ago, the nickel market snafu was largely linked to enormous short positions held by a single man: Chinese metal trader Xiang Guangda, the founder of China-based Tsingshan Holding, the world’s biggest nickel producer.

And now the exact opposite is happening in the nickel markets, only that this time around it’s the physical nickel markets and not nickel futures or a single trader that are to blame for the crash. Nickel prices have crashed in the current year, falling 21% in the year-to-date to $23,300 per tonne thanks to a massive supply glut as Indonesian production continues to outpace global demand. According to the International Nickel Study Group (INSG), the nickel market will face a supply-demand surplus of 239,000 tonnes, the largest in at least a decade and more than double last year’s excess of 105,000 tonnes. That revised figure is also way higher than the group’s last forecast in October when it expected the surplus to clock in at 171,000 tonnes in 2023.

Although global nickel demand is on track to register healthy 6.1% growth in 2023, matching last year’s demand growth, it won’t be anywhere near enough to absorb the wave of new production coming out of Indonesia. 

Spot Nickel Prices (USD/metric ton)

Source: Bloomberg

It’s quite surprising that nickel demand even rose at all in 2022 considering the World Stainless Association reported that stainless steel output fell 5.2% during the year. The stainless steel industry is the biggest consumer of nickel, gobbling up 75% of global production in a typical year. China is mainly to blame for the weakening nickel demand after the removal of subsidies and the shift towards non-nickel chemistries.

That said, EVs are quickly becoming an important nickel consumer. According to research house Adamas Intelligence, 17,137 tonnes of nickel were deployed in EV batteries in the month of February alone, good for 19% month-on-month and 47% Y/Y growth. 

Although the EV sector is growing at a brisk clip, it will still struggle to absorb surging production from the likes of Indonesia. INSG’s most recent monthly bulletin has reported that the country’s nickel mine output grew a huge 48% to 1.58 million tonnes in 2022 and by another 44% in the first two months of the current year. Indonesia slapped a full ban on the export of ore in 2020, meaning that all that mine output is now being converted to nickel products.

But not all nickel grades are facing a supply glut.

Indeed, whereas the supply of Class II nickel–containing less than 99.8% nickel–continues to grow rapidly, supply of Class I nickel–the grade traded on the LME–has declined 28% so far this year to 40,032 tonnes, the lowest level since 2007. Shanghai registered nickel stocks are even lower at just 1,496 tonnes thanks to China’s imports of refined nickel being increasingly replaced with intermediate products heading for the EV sector. The contango across the benchmark cash-to-three-months spread has contracted from over $200 per tonne in early April to just $12 currently, suggesting traders are growing more bearish about future nickel prices.

China Nickel pig iron 8-12% (Yuan / metric tonne)

Source: Bloomberg

Commodities Pullback

But the nickel markets are hardly alone. After a raging bull market in 2022, global commodity markets have been pulling back in 2023 with the World Bank predicting that global commodity prices will decline this year at the fastest clip since COVID-19 pandemic struck in late 2019.

According to the bank, overall commodity prices will contract 21% in 2023 relative to 2022, with energy prices projected to fall 26%. Brent crude oil is expected to average $84 a barrel this year, down 16% Y/Y, while U.S. and European natural-gas prices are forecast to be cut in half. Meanwhile, coal prices are expected to fall 42% in 2023 while fertilizer prices are also projected to decrease 37%, marking the largest annual drop since 1976. However, fertilizer prices are still close to their recent high seen during the 2008-09 food crisis.

Unfortunately, the World Bank says that falling food prices will bring little relief to the more than 350 million people facing food insecurity across the globe due to the fact that although food prices are expected to fall 8% in the current year, they will still be at the second-highest level since 1975.

Via Remix News,

Nineteen American in-flight refueling aircraft will be stationed at the Powidz Air Base in western Poland. According to the U.S. magazine Stars and Stripes, this is the latest sign that U.S. Armed Forces are shifting combat resources to strengthen NATO’s eastern flank.

The U.S. Air Force command in Europe confirmed that on March 10 of this year “American air tankers began working in their new main location in Poland.”

This was done as part of operation “Copper Arrow,” which demonstrated the efforts of the U.S. military command in Europe to “strengthen security on NATO’s eastern flank through forward deployed and stationed forces.”

“The cooperation of American air tankers with our NATO allies clearly shows how much we value our partnerships and how important it is to increase our interoperability,” said Colonel Timothy Foery, advisor to the U.S. Air Force Reserve Commander.

Foery noted that interoperability is evident when looking “at any photo of a KC-135 refueling a Polish F-16 or a KC-46 refueling a Finnish F/A-18.”

American air tankers KC-135 Stratotanker, KC-10 Extender and the newest in the U.S. Air Force fleet, KC-46 Pegasus, could all be sent to the Powidz Air Base.

The aircraft currently stationed at the Spangdahlem base in Germany, will be transferred to the Powidz air base as Unit 1. As emphasized by the U.S. Air Force leadership, this relocation also demonstrates “the ability of U.S. command to quickly deploy large, credible combat forces and equipment throughout Europe.”

The tankers stationed in Powidz can be used for refueling combat aircraft, including the world’s most advanced fighter jet, the F-35A Lightning II, which extends the range of NATO air missions. Stars and Stripes notes that eight F-35 aircraft of the Dutch Air Force have been stationed in the Malbork air base in Poland for several months.

#Watch a @USAFReserve KC-46 Pegasus refuel a Finnish F/A-18s for the first time in Finland airspace, as part of a @HQUSAFEAFAF partnership exercise called Copper Arrow. #TogetherWeDeliver @FinnishAirForce pic.twitter.com/awMoN0axD1

— USTRANSCOM (@US_TRANSCOM) April 20, 2023

Since the Russian invasion of Ukraine in February 2022, the presence of U.S. forces in Europe has increased, with the number of U.S. military personnel on the continent growing from 80,000 to 100,000.

U.S. Ambassador to Warsaw Mark Brzezinski recently stated that over 10,000 American soldiers are in Poland.

“The U.S. military’s shift to the east is another example of the United States’ efforts to create a permanent presence in the former Warsaw Pact country, an important member of NATO, which has over 300 miles of border with Ukraine,” said reporter Jennifer Svan in Stars and Stripes.

A month ago, the United States officially established its first permanent base in Poland. The U.S. Army garrison in Poznań, located about 100 kilometers from Powidz, will support the V Corps of the Army, which oversees NATO missions in the east.

Authored by Bruce Wilds via Advancing Time,

Younguns is a folksy term used mainly by people with a few years under their belt to refer to those far younger. Sometimes this term focuses on those under thirty. These people often don’t realize those injuries they see as badges of honor will far too soon turn to aches and pain. Today I find myself at low-ebb, it may be a combination of too much work and a recent birthday taking its toll.

Adding to this is the reality that we live in a world that has made a mockery of hard work and savings, this is a major disservice to those carrying the load. Many people fail to take into account that the socialist agenda of the far left is in many ways anti-social. As we look around it is easy to see that much of the workforce has gone full “John Galt” and decided not to participate in the job market. Much of this is driven by the notion that hard work does not pay big dividends and we might as well dump our problems off onto those stupid enough to accept them.  

Society and politicians are rapidly dismantling the rights of ownership. This transfer of rights constitutes a transfer of wealth whether we wish to call it by that name or not. This is the main reason so many of the most capable contributors to our economy are now moving toward the sidelines. Capable and smart people do not have to work hard to make ends meet and are proving this by going out and enjoying life rather than working to support those that won’t. When people decide to remove themselves from a game they see as rigged in favor of those far less deserving it is an indication of greater problems ahead.

Still, make no mistake, the left claiming it is “progressive” has no intention of melting quietly into the night. I fear those both in the middle and on the right that think things will turn around are overly optimistic. Those on the right often point to California as a failed state. They use as an example drug-infested San Fransisco. At the end of 2021, it was estimated that of the city’s roughly 8,124 people that were at the time “unhoused,” a full 73 percent were “unsheltered.”  This means they sleep out of doors, in tents, and under highway overpasses.

Catch-22 Is A Real Thing

What is being cast upon us is breeding a culture that lacks accountability. The legal system is failing. From the smallest to the largest issues we face, it seems few are being resolved in a way most people find uplifting. More often than we would like we are running smack dab into the proverbial catch-22 situations that try our souls. A catch-22 is a paradoxical situation from which an individual cannot escape because of contradictory rules or limitations. The term was coined by Joseph Heller, who used it in his 1961 novel Catch-22.

While much of the country views high taxes, rampant drug use, and crime as the reason many major retailers are closing stores in the state, its Governor is being touted as a candidate for the Presidency in 2024. The bad news is that if you think it can’t get any worse, you are wrong. Sadly, society has turned onto a fast path to ruin downward. A slew of lightweight JV thinkers have taken us down the rabbit hole when it comes to creating a better future.

We Need A Hero, But None Is In Sight

It could be argued that those on the far left have been joined by, or are being egged on and encouraged by those wishing to weaken the United States from the inside. Russia and China are generally painted as the villains in such a scenario. The real problem we face is that true leadership tends not to exist in a vacuum. The fact is that we need a hero and they are in short supply. It has been said, the “pioneers took all the arrows,” meaning it is much safer to travel west today. It also means people of real value will most likely be destroyed if they attempt to move to the front.

A feeling of hopelessness recently descended upon me when I became a victim of vandalism. How do you protect what can not be protected? The catch-22 here is that you have a very difficult time insuring an empty building but how do you rent it when it is constantly being ripped apart by vandals? While not the economic disaster that will end me, such events are “mentally” troubling. It is also why so many people shy away from owning hard assets, this applies to gold, real estate, and more. Readers of AdvancingTime know not owning “real things” is an investment strategy I consider problematic. 

The efforts of those in power to paint vandalism of private property as mischief is the reason so many Americans when given the chance, op to live in gated communities. In truth, we cannot “gate off” everything. This reflects society’s inability to make people behave. The failure of people to take responsibility for their actions signals greater problems ahead.

It does not help that we are facing a toxic mix when it comes to protecting our freedom. Big companies are predatory and big governments are stupid. The thing they have in common is they both want more control and power. In truth, we are the underdog in this ongoing struggle for control of our lives and progressives are promoting policies that empower those that want to control us. Throw in the likelihood of an economic reset or hard landing and you might say, if you think it can’t get any worse, you are wrong. Lowering your expectations may be in order.

By SpotGamma

New this Tuesday, the trading world now has a VIX1D (0-1 DTE) index. With HIRO, we give you a multi-day view under the SPX hood by showing how its zero DTE options are moving in real time. We also have this view available for hundreds of major stocks and ETFs. What this new index represents is a balance of zero-DTE and one-DTE options on SPX.

Nonstop 0DTE call buying all day (via @spotgamma) https://t.co/auzhlYZc7w pic.twitter.com/wyJASQj7SD

— zerohedge (@zerohedge) April 27, 2023

Let’s take a look at the first three trading days of the VIX1D.  First, on Tuesday, April 25th, call selling weighed down on the market, as indicated by the green line while the puts were not impactful. Then, on Wednesday, puts were more in control, leading the market up in the morning and then back down in the afternoon.  Lastly, starting with some call buying and then put selling for a doubly bullish lift on the index price, the market trended higher.  You can see the meaningful impact of the 0DTE tool throughout these three days.

Adding the new VIX1D as a datapoint to your trading arsenal can get you up to par. But if you combine that with our proprietary key levels, then this can really set your trading apart from the crowd.

One of over a dozen tools we provide specifically for analyzing index products is our interactive chart of Absolute Gamma, as shown here from Thursday night, which identifies call gamma in orange and put gamma in blue. This is across all option chains but you can also filter it down to zero DTE.

These high gamma levels are structural boundaries which have a statistically-significant influence over price action. The price tends to be attracted to these levels, but price movements also generally slow down near them and reverse direction.

Alternatively, here is a view of that same Absolute Gamma tool but restricted to the scope of zero DTE option structure. Although the bigger picture of all chains shows an important structural firewall at 4000 for the broader market, that 4000 level is too far away for zero DTE traders to take meaningful interest. What this more focused view clarifies is that zero DTE options have the heaviest market gamma between 4100 and 4150, which is where the market was taking its bets for Friday.

Below 4100, there are not enough puts to generate substantial gamma.

This structural backbone provides context which helps to make signals from VIX1D less noisy. We can use key gamma boundaries and levels to set up high-probability trades. In outlier events where the price breaks outside of these ranges, especially if the price is still below the Call Wall  or above the Put Wall, there is less gamma to slow down the price and there can be some very big moves akin to the price escaping from the bottom or top of a volume profile. If breaking above a new level, all the buyers are making money (rather than trying to get it back at resistance), and that trend can easily move beyond expectations.

As an example of a tactical application, if you see HIRO option flow moving up and leading the price, then you might want to open a covered call (long shares and short a call) to enhance your position and collect some yield if there is not much movement in the underlying price. Or if your outlook is directionally neutral, such as if the price is near our largest Absolute Gamma level and there is positive market gamma, then you could try a credit iron condor: short two options near the middle and long options further out-of-the-money as wingtips. This credit iron condor strategy harvests time premium if realized volatility remains low.

On the other hand, if you are neutral but you expect volatility to expand, then you could try something like a long straddle, which will have defined risk but uncapped potential profits if there is a large move in either direction. Data suggests that a breach to the downside of our Volatility Trigger would usually be a good time to do that.  

If you are serious about trading, then we invite you to be on the ground floor of this new VIX1D arena with us and to join us in the discussion on our members-only Discord.

Start a free trial now to see our daily analysis of these developments and also to have the best tools to get you a head start on this new frontier.