Price Forecast:

Bullish Case: Implied volatility remains elevated, suggesting market participants anticipate significant price movement, potentially signaling a bullish reversal due to market corrections or positive news events in early 2025.

Bearish Case: Historical return patterns indicate a persistent downtrend, compounded by low trading volumes and declining implied volatility, suggesting continued bearish sentiment in the market.

Potential Outcomes:

1. Continued bearish trend: 60% probability;

2. Significant volatility spike leading to short-term recovery: 25% probability;

3. Steady bullish growth supported by macroeconomic recovery: 15% probability.

Trading Oracle: Consider a bullish debit spread targeting January 2025 with SH 42.00 and 43.00 calls. The current volatility environment suggests potential for significant price movement upwards, enhancing profit opportunities from volatility spikes while maintaining manageable risk exposure.

December 13, 2024