🎢 The Stock Market Roller Coaster: A Wild Week of Volatility 🚀

Hey there and welcome back to The Trading Brief! Let’s dive right into this weeks edition, it is a little more interactive and different than our typical publication—we hope you enjoy!

Table of Contents

1. Trading with Volatility

2. Prop Firm Deals

3. Important Data Events

4. This Week's Trading Levels

NEWS
🎢 The Stock Market Roller Coaster: A Wild Week of Volatility 🚀

Last week, the stock market treated traders to a breathtaking display of volatility. The S&P 500 (ES) and Nasdaq 100 (NQ) futures were at the center of the action, with price swings that could rival the most thrilling amusement park rides. For futures day traders, it was a week of adrenaline-pumping opportunities—and risks. Let’s break it down.

Daily Ranges: A Statistical Recap

The daily ranges on ES and NQ were nothing short of dramatic:

• ES (S&P 500 Futures): The average daily range last week clocked in at 93 points, a significant jump from its 30-day average of 61.5 points.

A 51% increase in daily range! Wednesday saw the largest range at 241.5 points, fueled by hawkish commentary from the Federal Reserve.

• NQ (Nasdaq 100 Futures): NQ outdid itself this past week with an average daily range of 563 points, compared to its 319 point 30 day average.

A 76% increase in daily range! Wednesday’s session was the standout, with a jaw-dropping 1076.50-point swing.

To put these numbers in perspective, such expansive ranges imply opportunities for massive profits or devastating losses, depending on how traders positioned themselves.

The Volatility Index (VIX): The Calm Amid the Storm?

The VIX, often referred to as the market’s “fear gauge,” surged to a two-month high of 24. This index measures the market’s expectations for near-term volatility based on S&P 500 options.

So why does a high VIX often translate to more volatility? When VIX spikes, it signals heightened uncertainty among investors, often driven by macroeconomic concerns or unexpected news. This fear translates into wider price ranges, as traders grapple with rapidly shifting sentiment.

As seasoned trader Mark Douglas once said, “The best traders aren’t afraid of volatility; they embrace it.” But how do you embrace volatility without getting crushed by it?

Trading Strategies for Volatile Markets

Surviving—and thriving—during turbulent weeks like the last one requires a game plan. Here are a few strategies tailored for futures day traders:

1. Tighten Your Risk Management

   • Tip: Reduce your position size and tighten stop-loss levels. For example, instead of trading your usual 5 ES contracts, consider scaling down to 2 or 3. Smaller positions reduce the impact of large price swings on your account.

2. Focus on Key Levels

   • Tip: Identify major support and resistance levels and trade with discipline.

3. Employ Scalp Trading

   • Tip: With wide ranges, scalping smaller moves becomes more viable. Aim for 5-10 points on ES or 20-30 points on NQ. Quick in-and-out trades can add up.

4. Avoid Overtrading

   • Tip: Volatile markets are exhausting. Pick your spots and don’t chase every move. Remember, “Cash is a position too.”

5. Use the VIX as a Guide

   • Tip: Monitor the VIX to gauge market sentiment. When VIX is above 20, expect wide swings and adjust your strategies accordingly.

A Lighthearted Look Back

If last week had a theme song, it would be “Twist and Shout.” Traders were spinning and shouting their way through the chaos, clutching coffee cups in one hand and mouse clicks in the other. As one Reddit user quipped, “This market isn’t for the faint of heart. It’s for the caffeinated and the brave.”

Looking Ahead

The million-dollar question: will the volatility persist? With the VIX still elevated and more economic data on the horizon, traders should prepare for another potential roller coaster. Stay nimble, stay disciplined, and as always, keep your sense of humor intact.

Remember, volatility is the lifeblood of futures trading. It’s not about avoiding the storm but learning how to sail through it. Tighten your seatbelt—the ride isn’t over yet.

What to Expect This Week with Christmas

With Christmas just around the corner, traders should anticipate lighter-than-usual trading volumes. Historically, this period sees reduced market activity as institutional and retail traders alike take time off for the holidays. However, lower volume can sometimes exacerbate volatility, as fewer participants can lead to sharper price moves.

Key points to watch this week:

• Economic Data Releases: Keep an eye on any unexpected data drops that could move the markets. Even minor surprises can create outsized reactions during low-liquidity periods.

• End-of-Year Portfolio Adjustments: Fund managers often rebalance portfolios before year-end, which can create unusual flows in the market.

• Holiday Schedule: The markets will be closed or operate on shortened hours on Christmas Eve and Christmas Day. Plan your trading schedule accordingly.

For futures day traders, this week offers a chance to wind down and reflect on the year’s performance—or to capitalize on any remaining opportunities before the calendar turns. As always, trade cautiously and enjoy the holiday spirit!

Remember, volatility is the lifeblood of futures trading. It’s not about avoiding the storm but learning how to sail through it. Tighten your seatbelt—the ride isn’t over yet.

PROPRIETARY FIRMS
Best Prop Firm Deals 12/23

1. My Funded Futures is offering up to 12% off on certain plans! Use code SUCCESS

2. Apex Trader Funding is offering 80% off! Use code SUCCESS

3. Take Profit Trader is offering 50% off! Use code DEAL

4. Tradeify is offering 50% off Growth and Advanced accounts!

These are the firms that we currently recommend, this list is updated weekly!

EVENTS
Important Data Events - Week 52

The last week of the year! These are some market moving events that are occurring this week, take a quick screenshot of this list and set reminders as markets can get volatile during these times.

Monday, December 23rd

Tuesday, December 24th

Wednesday, December 25th

Thursday, December 26th

Friday, December 27th

WEEKLY TRADING LEVELS
FUTURES INDICIES

Enjoy this list of levels that have been curated for you! These levels are some major support and resistance levels that have been identified as areas of interest.

Use them to guide your charting, happy trading! ☘️