EWO Trade Alert subscribers have enjoyed an excellent start to December 2020 with 7 winning trades closed out in just the first 10 trading days of the month. Most of these trades have been entered and exited in just a few weeks, in fact trade #262 in ARKW and #267 in TOT were completed in just a couple of days each for respective returns of 51% and 60%.
With that said, we are definitely seeing hints the expected volatility returning to the market with the VIX drifting slightly higher over the past week. We are expecting to see more volatility between now and the end of January 2021 and consequently starting to increase positions in the EWO Volatility Strategy. Rob Roy, Chief Market Strategist believes the proprietary Strangle set ups in Volatility Strategy are an ideal way to manage risk but still leave good ability to profit during times of significant uncertainty as we seeing at the moment.
After Fridays close Rob commented “We’re seeing the S&P trade significantly below the 10-day moving average for the first time in weeks, literally since the beginning of November, so that’s a sign of some weakening that we need to watch. Having said that, for the past couple of days even though we have opened below the 10-day moving average, the market has been able to trade up through the session and hold that level at the close”.
Rob says we’d need to see a close and confirmation below that moving average before we change our current view, however in his words “It’s definitely time to be very cautious right now and that’s why we weighting our Volatility Strategy, because it has puts and therefore downside protection in every position”.
To learn more about the Volatility Strategy click here.