October Gets Off to a Spooky Start

But opportunity is here!

Now THAT'S terrifying!

Popping up on the radar this time are SPY, SCTY, TMKR, RUT, and the VIX

SPDR S&P 500 ETF (SPY)

Looking at the RSI and W%R, we're right at the "rebound" levels experienced on a weekly chart sine the onset of QE3 in September of 2013. We are also right on that weekly trend line since March of last year. If that fails to hold at this week's close, we might be in for some trouble. I don't think that's going to happen, I think the BTFD herd will come swooping in tomorrow and Friday, especially if we get a good September employment report. Today's big down move was apparently on the back of Ebola coming to the US and slowing growth indicator prints globally, though most notably in Germany. If we close out the week above that trend line, I'm looking to trade an ITM/ATM call spread for November.

SolarCity Corp (SCTY)

SCTY has been getting "moliwhopped" lately, declining about 17% last month. While it would have been a good short, and I know a few people who correctly predicted that move, but its oversold and good support is right around the corner. 1st is right around 54, the take off point (which blew up one my iron condor back in June). 2nd is the start of the "run-up-to" the take off point, and 3rd being that strong double bottom just south of 47. I will wait to see if support is confirmed at the 1st line before selling a put spread beneath the market, as IV is north of 60%.

Tekmira Pharmaceuticals Corporation (TKMR)

Don't need a chart for this, it's pretty simple. This stock was up over 30% today on the news of Ebola (one case, contained, and in Texas) coming to the US. This company makes hazmat suits. That's pretty much it. The stock has more than doubled in under a month but also sold off over 50% prior to that, meaning IV is, yeah, SUPER HIGH! OVER 100%! That means we can get crazy far away from the market for a call spread or strangle... except, the move was unanticipated, and there are no strikes that far away from the market on the call side to even trade. We'll see if that changes in the coming days, but if it doesn't happen soon, the trade might be gone.

RUSSEL 2000 Index (RUT)

Oh boy. The Russel 2000 is an index of small cap "growth" stocks (momo), and it's been having trouble getting anywhere this year. In fact, it's down on the year. Market top? I don't know, but it's once again sitting on that key support level. If that's broken, the shorts are going to pile in to this thing via its tracker ETF IWM. It's entering oversold territory, but that will not stop a bear mauling! If we fail to see a bounce here, naked puts on IWM will be attractive: the fall will be precipitous and swift, right down to 1040 at least. If we catch a bounce, a call spread will suffice, as it has rocketed off this support multiple times.

S&P 500 Volatility Index (VIX)

As you can see, everytime the VIX reaches this 17ish level, it drops quickly back down to its average area between 13 and 14. This time is no different, and if the S&P 500 is set to bounce of support, then the VIX will fall right back down. Selling Oct14 20/22 calls @ 0.30 will most likely prove profitable.