TRADING WEEK JAN 21ST-JAN 24TH

You'll notice that even with the strong bull run in SPY there was only a small dip in the VIX. That's because the bullish move happened a little too quickly. The market has a frothy feeling to it. It has more of a feeling that it's at the end of a bull run rather than the beginning of a new leg. You can't pinpoint when the froth will settle, however. The macro news is all good. Iran's tensions with Saudi Arabia, Israel and the USA appear to be in abeyance. The tariff war has cooled off and most importantly there doesn't appear to be any interest rate hike in the near future. I'm sticking with the bullish vertical spreads until they don't work anymore. It's boring but you have to take what the market gives you. It's airlines week for the earnings season. UAL is releasing after the close on the 21st with AAL and LUV announcing before the opening on the 23rd. JNJ releases before the opening on the 22nd. The big daddy for this week is NFLX, which releases after the close on the 21st. For NFLX the implied volatility (IV) for the 340 strike price expiring on January 24th is 88%, while the IV for the 340 strike expiring on February 14th is 44%. That's double the IV for the three week long time spread. If it gets to 2 1/2 times the IV for the at the money strike on the afternoon of the 21st then it's time to pull the trigger.