I make it rain, I make it rain

April 18, 2024

Stock market volatility is at the highest levels since October.

The majority of stocks are NOT in uptrends.

This market is NOT like it was last year.

In fact, coming into today, the majority of stocks on the NYSE are down for the year. Also 2/3rds of the stocks on the Nasdaq are negative for the year.

Go and count for yourself.

You'll quickly see that the majority of stocks in the Large-cap Nasdaq100 are down this year. Same for the Small-cap Russell2000 Index and the S&P Mid-cap 400.

Different markets call for different strategies.

Here's the $VIX hitting levels this week not seen since Halloween:

So what do we do about it?

I can't help but think about the great New Orleans philosopher Dwayne Michael Carter Jr, also known as "Lil Wayne", or simply "Weezy".

Mr. Carter once said, "Got a hand full of stacks, better grab an umbrella, I make it rain, I make it rain...."

This is what we want to do with Calls and Puts in this environment. We want to, "Make it rain".

We've been selling calls. We've been selling puts. We're collecting that income.

This market has a, "Hand full of stacks", if you will, referring to the money available to acquire currently, with such high premiums.

To Weezy's point, it's almost like we need to "grab an umbrella".

Get while the getting is good.

Some market participants don't like this type of market. They're too impatient, they don't know how to relax, collect income and enjoy the high premiums.

It's simple.

There is a time and a place for everything.

In some markets, like most of last year, we want to buy breakouts, ride trends higher and NOT sell premium because premiums were so low.

We were net buyers of options last year because premiums were cheap.

This year is different.

Time to collect.

We discussed it all on last night's LIVE conference call. Make sure to give it a watch here and download the slides.

If you're not already a Premium Member, you can join here Risk Free and check out the video and trades for yourself.

Let me know what you think!

Also See:

Selling Puts in Berkshire Hathaway