 Hey everybody, welcome it's Hari Swaminathan from optiontiger.com and today is Wednesday, August 23rd. So I wanted to do a quick market update because seeing some kind of a pattern on the S&P and so it's worth looking at it a little more closely and if you recall about two updates ago I said that this 2500 might be a pretty good resistance point and of course this is the ES let's take a look at the SPX it didn't quite get there but you can see of course you know markets never will be like perfect to the dot but this is pretty close to 490 I would have expected it to go may perhaps a little bit higher about 3 to 5 points higher but this is good enough because this you can see it was a bar that was rejected very strongly from its top and ended more towards the bottom but we have to go back to the ES because of volume information and so here the volume was high that was this bar I'm sorry here you can see this one there was no seemed like there was no you know any upside interest anymore as far as the volume but of course some of this you can only know by hindsight here it got rejected not on very high volume but then you have now if we've started seeing some very big range bars okay so basically what's that telling us is and really the study that will tell you that properly is the ATR average true range and if we put that and take out money flow and apply okay see you can see that the average true range has started increasing so basically what this is saying is the average true range is now 17 points on the ES which is which would be the same as the SMP so it's about 17 points on a daily basis so which is pretty high you know and so that's the kind of movement we are seeing in the SMP and so what kind of trades would be good for that is obviously a strangle a straddle that you know big moves on any given day and the only thing you have to watch out for is the wicks level because if you buy it at a lower wicks and then it goes higher you know obviously that's going to be good for us so here we have the wicks at 12 yesterday it went up just a little bit now if we look at the options for the SMP and let's see how we can play this because it's a good opportunity when we have an average true range that's pretty high so if you see the two days the one that's expiring now this Friday is plus or minus 16 then that's only one standard deviation so here if we go out one more this would be next Monday and this would be Wednesday and this would be Friday I think or Thursday so you need to go out a little bit to but then you're going to pay higher option prices as well so let's go somewhere with seven days one week let's say this is like a one week trade and right now it's at 2450 of course the SMP futures are down today eight points so let's say it's at 2445 so in that case 10 points out would be 2435 and 10 points out over here would be yeah so totally your your strangle might cost us about 11 to 12 dollars okay so fairly expensive of course you can decide the number of contracts but just to see how that goes I'm going to put this straddle the strangle on I'm going to wait for the open because there's going to be quite a bit of movement so I don't know what the prices are but a strangle here might make sense and once it starts moving to one side we can try to get some premium theta decay from some of these earlier series here so the average two range I think is moving up and that's what we have to keep in mind and if we have a good day like two days ago we had a good day if you see the charts yeah this was a good day and so the wicks would have come down quite a bit here that's the time to go for the strangle all right so we missed that of course I missed it too because I was like tied up with the move and everything but here we are so you know even now I think it's not too bad let's see what the wicks level is after the market opens and the strangle might make sense thanks