Is Volatility Poised to Return to the Market? |

Last Week’s Highlights at IVolLive:

  • Register HERE for our next live webinar on Tuesday, October 17th where we will discover How to go Back In Time With The Options Market.
  • Get a free IVolLive Trial HERE.


Another Potential Opportunity with Oil...

October 13, 2023

Charts: 1:45 pm EST


The timing of trades can be just as important as what is being traded in the first place. Often, the market will reward patient traders with better entry/exit points.

One good example of that is oil. After a dramatic runup during the summer, oil sold off hard in early October. Then, conflict erupted in Israel...

While it's impossible to predict geopolitics one thing is for sure: then resolution will not be easy or swift.

This means there will be multiple trading opportunities if timed correctly. Speaking of timing, let's do two things: First, we'll use our IVolLive charts as our timing compass, and second, we'll use the Sentiment Analyzer to check in on the poster child for big oil: Exxon (XOM):

Source: IVolLive
(Source: IVolLive)

How to Play It

Here are the key takeaways from this three-month chart:

• Exxon's share price has bounced then retraced following the outbreak of violence.
• At the same time, Implied Volatility (green line), it is coming down. This means option premiums are also declining.
• With option premiums getting cheaper - and Exxon retracing to essentially the same price it was trading at in the beginning of October - now could be a good time to strike on a bullish bet.

And speaking of Sentiment, let's pull up the webinar topic this week to dig deeper into Exxon's current Sentiment:

Source: IVolLive
(Source: IVolLive)

The Sentiment Analyzer tells us that Exxon is trading in a bearish formation and is rather quiet (i.e. option premiums are not inflated from overly high volatility).

This is a great example of how the Sentiment Analyzer can be a leading contrary indicator before a stock switches over from Bearish to Bullish, or vice versa.

(Watch an encore replay of Tuesday's webinar on the Sentiment Analyzer HERE).

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