(And You Should Too)
| | Don Kaufman here. | I don't sleep well at night when the S&Ps are at or near highs and volatility refuses to back off. | Most traders lose sleep when markets are selling off hard. That makes sense - red everywhere, portfolios bleeding, margin calls incoming. | But here's what separates experienced traders from the crowd: I get more nervous when everything looks calm on the surface but the market's internal wiring is screaming danger. | Right now, we've got the S&P sitting pretty near recent highs. The VVX is running 104, 105 - that thing is HOT. This looks exactly like we're in the middle of some huge selloff that's just taking a breather. | The Volatility Lie Most Traders Believe | Here's the thing nobody talks about: volatility should compress when markets grind higher. That's how healthy bull markets work. Volatility expansion happens during uncertainty and fear. Volatility compression happens during confidence and steady gains. | So when you've got elevated volatility with calm price action, the market is telling you two different stories. Price says "everything's fine." Volatility says "we're expecting fireworks." | I've been trading since '98, and I can tell you - when these signals diverge this badly, volatility wins. Always. | Look at today's setup. We've got a $43 expected move in the S&P for what appears to be a nothing day. The marketplace is pricing in significant movement, but the surface action feels docile. | What This Really Means | This divergence typically happens right before one of two things: a sharp move that catches everyone off guard, or a grinding period where volatility slowly normalizes downward. | But here's the crazy part - we've had two consecutive weeks where the S&P didn't hit either edge of its expected move. When this pattern breaks, it breaks HARD. | All that pent-up volatility has to go somewhere. | Click here to continue reading | | | This Guy Made $1,445 While the Market Crashed 20% | Remember April when everything went to hell? | Market tanked almost 20%. Retail traders panicked. | Don Kaufman made $1,445 on one trade. | He put it on April 1st, then watched the market "absolutely freaking tank." | His Christmas tree trade? Still profitable. | While everyone else was bleeding, he was banking. | The difference? He wasn't guessing direction. He was selling the chaos. | Today the same setup is back. Don just went live and filled another one at the market's absolute low. | WATCH THE REPLAY BEFORE VOLATILITY SPIKES AGAIN | |
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