Hey Traders,
Just yesterday, I told you this market was trapped.
Stuck between the trendlines.
And right on cue, the S&P rallied up into the long-term 200-day moving average… and then rolled right back over.
Was it the Fed?
That’s what the headlines are saying today.
But let’s be real — if the market had gone up, they’d have said that was because of the Fed, too.
News outlets will always find something to blame.
But if you ask me? It wasn’t Powell… or rates… or the price of tea in China.
It was the trendline.
Because the market doesn’t trade the news — it trades the structure.
And if you want proof, take a look at this chart:
See how price just barely got a hair above the 200 day (red) trend line before bouncing right down and hitting the the 50-day (blue) trend line? That’s what I mean when I say the market’s trapped.
No clear breakout. No clean breakdown.
Just back-and-forth chop inside that zone.
And this is exactly what I warned about yesterday:
When the market’s caught between trendlines like this, it’s the hardest market to trade — if you’re like most traders relying on big directional moves.
But for traders like us — here’s the good news:
This kind of sideways volatility is exactly the kind of environment that favors options sellers.
Because when traders panic or get whipsawed, the option premiums get inflated.
That gives us room to collect income — even without picking a direction.
So while everybody else is trying to guess what Powell meant by that one sentence in the press conference…
I’m sticking with trades that give me a cushion.
Credit spreads. Covered calls. Strategies that get paid in sideways markets.
Let the trendlines trap the market.
We’re selling time and volatility — and walking away with the paycheck.
Trade well,
Jack Carter
P.S. Speaking of “trading between the trendlines”… Here’s how I’m collecting those “Golden Premiums”
