On May 19 two things occurred. First, the SPX hit its head on one of the oldest technical indicators the market has, the 200 day moving average. Many traders and institutional investors consider an underlying bullish when it is trading above its 200 day and not until then. Secondly, that same day the VIX hit a support level at 16 and didn't break it. Any time you have the SPX smacking a resistance level and the VIX hitting a support level, roll out the yellow "proceed with caution" tape.

Now Memorial Day has come and gone and summer is upon us. What does this mean for the market? Lighter volume and unpredictable movement. News tends to be the main driver which is very hard to trade. So exactly how would you trade it? Look for high-probability, delta-neutral strategies that an investor to make money on positive theta decay. Until the market does rally with conviction above that 200 day moving average, maintain a neutral posture and sit back and let theta decay make money. Be warned . . . it's like watching paint dry . . . but at least its green paint!

Successful Trading!

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