We’re in that stretch of the year when seasonality makes holding long positions an act of extreme patience. The last couple weeks of summer often bring thinner volumes, and with fewer participants, it can feel like watching paint dry.
But this is by no means a call to let our guard down. I can vividly remember how quickly late August can turn volatile.
Think back to August 2015: China suddenly dropped into a bear market, losing 10% in just a couple of days. The shockwaves ripped through U.S. markets. I remember it clearly because I was heavily short volatility at the time. I’d been crushing it most of that year, but in just three brutal trading sessions I gave back eight months of gains. Still stings to think about.
That memory reminds me: patience isn’t just about waiting for opportunities, it’s also about respecting risk.
So here’s how I’m approaching this period: I’ll keep taking trades, but only if they’re clean, A+ setups. If there’s any doubt, it’s probably best to sit it out.
We’ve got Powell speaking at Jackson Hole later this month—a potential spark for volatility. And of course, the White House never misses an opportunity to drop a headline that sends traders scrambling.
In the meantime, I’ll be easing off the gas pedal. Staying patient, staying vigilant, and waiting for the market to show me it’s ready.
Because right now, most of what’s out there is just noise.
Sean McLaughlin | Chief Options Strategist, All Star Charts
